Salary vs dividend calculator, 2026/27
Set your company profit before director pay and the salary you plan to take. The calculator runs the full chain, employer NI, corporation tax relief, personal tax, and shows total take-home and the overall tax rate on the profit.
The salary vs dividend calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. 2026/27 rates. Employer NI is 15% above £5,000; employment allowance is £10,500 and is not available to single-director companies with no other employee. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under salary, dividends & director pay. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Total take-home
Dividends available
Profit after salary, employer NI and corporation tax.Corporation tax
Employer NI
15% above the £5,000 secondary threshold.Personal tax and employee NI
Total tax on the profit
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
Why the mix matters
Salary is deductible for corporation tax but attracts employer NI at 15% above £5,000 and employee NI at 8% above £12,570. Dividends carry no NI but are paid from profit that has already suffered corporation tax at 19% to 25%.
Neither is universally better. The right split depends on the company's profit level, whether the employment allowance is available, other income you receive, and whether you want pension contributions or a mortgage-friendly salary.
The £12,570 salary and why people choose it
A salary at the personal allowance uses no income tax and produces a qualifying year for the state pension, while creating a corporation tax deduction. For a sole director with no employment allowance, the small employer NI cost above £5,000 is usually still outweighed by the corporation tax saved.
Where a second employee makes the employment allowance available, a higher salary often improves the outcome, which is exactly what the toggle above tests.
Do not forget employer pension contributions
A company pension contribution is deductible for corporation tax, free of NI and free of personal tax within the annual allowance. For higher earners it is often the most efficient pound the company can spend, and this calculator deliberately leaves it out so you can compare the cash routes cleanly.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Is it better to take salary or dividends?
For most owner-managed companies a modest salary plus dividends beats salary alone, because dividends avoid National Insurance. The exact optimum depends on profit, employment allowance availability and your other income.
Can a sole director claim the employment allowance?
No. A company where the only employee paid above the secondary threshold is a single director cannot claim it. Adding a genuinely employed second person can change that.
Does a higher salary help with a mortgage?
Sometimes. Many lenders assess director income as salary plus dividends, or as salary plus retained profit share, so speak to a broker before restructuring your pay purely for lending purposes.
How often should I review my salary and dividend split?
At least once a tax year, before 5 April, and again whenever profits, shareholdings or your other income change materially. Rates and thresholds move at each Budget, so last year's optimum is rarely this year's.
Keep going
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