Salary vs Dividends Calculator 2026/27
Find out the most tax-efficient way to pay yourself from your limited company — salary, dividends or a combination of both.
Your details
Total pre-tax cost to the company
"Higher" assumes other income has filled the basic rate band already.
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Results are estimates only and do not constitute financial advice.
This calculator assumes you are the sole director/shareholder. Tax efficiency depends on your personal circumstances — always speak to an accountant before making decisions.
Optimal extraction examples — 2026/27
Click any row to load it. Assumes no other income, optimal salary £12,570 + dividends.
| Total extracted | Take home (optimal) | Total tax | Saved vs salary |
|---|
How it's calculated
All salary: Your total extraction becomes gross salary + employer NI. You pay income tax and employee NI on the salary, and the company doesn't pay corporation tax on this portion.
All dividends: The company pays corporation tax on profits, then pays the remainder as dividends. You pay dividend tax on amounts above £500.
Optimal mix: Salary of £12,570 (uses personal allowance), with the remainder as dividends. The salary is income-tax and employee-NI free, while only a small employer NI applies. This is usually the most tax-efficient.
Frequently asked questions
Around £12,570 — equal to the personal allowance. No income tax, no employee NI, only modest employer NI.
No. Dividends are not subject to National Insurance — one of the main reasons they're more tax-efficient than salary.
£500 for 2026/27. The first £500 of dividend income is tax-free, regardless of band.