Salary & Dividend Optimiser
Pay yourself too much salary and you waste personal allowance against National Insurance. Take too much dividend and you push yourself into higher-rate dividend tax. The calculator finds the split that leaves the most money in your pocket at 2025/26 rates, accounting for corporation tax, both flavours of NI, income tax and dividend tax in one pass.
Your inputs
Optimal extraction
Salary
£60,000
Dividend
£47,850
Director net take-home
£77,227
The tax breakdown
- Corporation tax
- £12,150
- Employer NI
- £0
- Employee NI
- £3,211
- Income tax (on salary)
- £11,432
- Dividend tax
- £15,981
- Total tax
- £42,773
Compared to other strategies
- vs all-salary extraction
- +£0
- vs zero-salary, all-dividend
- +£2,474
That strategy nets £77,227. Optimal nets £77,227.
That strategy nets £74,753. Optimal nets £77,227.
How this works
For a UK limited company director, the most tax-efficient extraction strategy typically combines a small salary (up to the primary NI threshold) with dividends drawn from post-tax profits. The calculator models corporation tax, employer NI, employee NI, income tax and dividend tax together so you see the true net position rather than each tax in isolation.
It assumes you have no other income, no student loan repayments, standard UK personal allowance, and no pension contributions. For a tailored model that factors in your actual position, book a free call below.
Frequently asked questions
- What rates does this calculator use?
- UK 2025/26 tax year rates. Personal allowance £12,570. Basic rate 20% (£12,571-£50,270). Higher rate 40% (£50,271-£125,140). Additional rate 45% (above £125,140). Dividend rates 8.75% basic, 33.75% higher, 39.35% additional. Dividend allowance £500. Employer NI 15% above secondary threshold (£5,000). Employee NI 8% above primary threshold (£12,570). Corporation tax 19% small profits, 25% main rate.
- Does it cover the marginal corporation tax rate?
- Yes. For company profits between £50,000 and £250,000, marginal relief applies giving an effective rate of 26.5% on the slice between those thresholds. The calculator applies this correctly when modelling the corporation tax impact of paying salary vs dividend.
- Is the result personal tax advice?
- No. This is a model based on standard 2025/26 thresholds. It assumes no other income, no student loans, no pension contributions and standard UK personal allowance. For advice specific to your situation, book a free call with our team.
- How does taking salary vs dividends affect corporation tax?
- Salary is a deductible business expense that reduces taxable profit, so it reduces corporation tax. Dividends are paid from post-tax profits, so they don't reduce corporation tax. The optimiser models both effects together to find the true net position.
The optimum split changes with the rest of your tax picture
Add a working spouse, a buy-to-let, a student loan, a pension contribution or a planned BADR exit and the answer shifts. We build a personal extraction model for owner-managed companies that accounts for the moving parts, then revisit it each year before March.
Book a free call