Salary vs Dividend Calculator

Enter your company's profit and compare what you take home at different salary levels, with the rest paid as a dividend.

Your company

Tax year

Profit before your salary (£)

GBP

Compare a salary of (£, optional)

GBP

The company claims the Employment Allowance Not available if the director is the only employee paid above £5,000.

I pay Scottish income tax

Best take-home

£46,090.72

Salary £12,570 Dividend £37,498

Total tax

£13,908.64

Company and personal

Overall tax rate

23.18%

Of £60,000 profit

Salary levels compared

Salary	Employer's NI	Corporation Tax	Dividend	Income tax	Employee's NI	Take-home
£0 No salary	0	12,150	47,850	3,739	0	44,111
£5,000 NIC secondary threshold	0	10,825	44,175	3,881	0	45,294
£6,708 Lower earnings limit	256	10,305	42,731	3,910	0	45,529
£12,570 Personal Allowance · best	1,136	8,796	37,498	3,977	0	46,091
£52,826 All salary	7,174	0	0	8,562	3,067	41,196

Estimate only. One director who owns all the shares and has no other income. The company's year is taken as 1 April to 31 March, with no associated companies, and all profit after Corporation Tax is paid as a dividend. A salary at or above the lower earnings limit (£6,708) counts towards the state pension. Figures in the table are rounded to the nearest pound.

Guidance only. This calculator gives a general estimate and is not tax advice. Speak to your accountant before relying on these figures or making any decisions based on them.

Why directors mix salary and dividends

A salary is deducted from the company's profit before corporation tax, but above the thresholds it carries employee's and employer's National Insurance. Dividends carry no National Insurance and are taxed at lower rates, but they are paid out of profit that has already borne corporation tax. The best mix depends on how those two effects balance at your level of profit.

What the calculator assumes

One director who owns all the shares and has no other income, a company year that matches the tax year, and all profit after corporation tax paid out as a dividend. The Employment Allowance is only available where the company has another employee paid above the secondary threshold, so a sole director normally cannot claim it.

State pension

A salary at or above the lower earnings limit counts as a qualifying year for the state pension, even though no employee's National Insurance is payable until the primary threshold.

Need to file the CT600?

This calculator is for guidance only. Tax Optimiser prepares the full corporation tax computation and files the CT600 and accounts with HMRC and Companies House.