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Home › Calculators › Salary vs dividends
Updated for 2026/27Free · no sign-upSalary vs Dividend Calculator 2026/27
Find the most tax-efficient way to pay yourself from your limited company in 2026/27. Enter your company profit and salary to compare take-home pay.
Your take-home
£55,765
| Salary | £12,570 |
| Employer NI | £1,136 |
| Corporation tax | £13,818 |
| Dividends paid | £52,476 |
| Income tax on salary | £0 |
| Employee NI | £0 |
| Dividend tax | £9,282 |
| Total tax (company + personal) | £24,235 |
Comparing the two common salaries: £12,570 gives £55,765 and £5,000 gives £55,012 take-home, so £12,570 comes out ahead for these figures. Assumes all remaining profit is paid as dividends.
How it works
How this calculator works
Salary is a deductible cost for the company, but it may attract employer and employee National Insurance. Dividends are paid from profit after corporation tax and are taxed at lower rates in your hands.
The calculator pays your chosen salary, works out employer NI and corporation tax (including marginal relief), pays the rest as dividends and then calculates your income tax, NI and dividend tax for 2026/27.
Worked example
A sole director with £80,000 of company profit takes a £12,570 salary. The company pays £1,136 employer NI and £13,818 corporation tax, leaving £52,476 to pay as dividends.
- Dividend tax: £9,282
- Take-home: £55,765
2026/27 rates
Rates and allowances used
| Personal allowance | £12,570 (reduced by £1 for every £2 over £100,000) |
|---|---|
| Basic rate 20% | £12,571 to £50,270 |
| Higher rate 40% | £50,271 to £125,140 |
| Additional rate 45% | Over £125,140 |
| Employee Class 1 | 8% on £12,570 to £50,270, then 2% |
| Employer Class 1 | 15% above £5,000 |
| Employment Allowance | Up to £10,500 |
| Dividend allowance | £500 |
| Dividend rates | 10.75% basic, 35.75% higher, 39.35% additional |
| Small profits rate | 19% on profits up to £50,000 |
| Main rate | 25% on profits over £250,000 |
| Marginal relief | Between £50,000 and £250,000 (fraction 3/200) |
Rates for England, Wales and Northern Ireland, tax year 6 April 2026 to 5 April 2027.
FAQ
Salary vs dividends questions
What is the most tax-efficient director salary for 2026/27?
For many sole directors it is £12,570 or £5,000, depending on whether the company can claim the Employment Allowance. The calculator compares both for your figures.
What are the dividend tax rates for 2026/27?
After the £500 dividend allowance, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band.
Can I take dividends if my company has no profit?
No. Dividends can only be paid from retained profits after tax. Paying them without enough profit can create an illegal dividend.
Does this include pension contributions?
No. Employer pension contributions can be very tax-efficient, so speak to us if you want them included in your plan.
Want an accountant to handle it?
Our ACCA and AAT qualified team in Bolton can take care of your limited company accounts and tax for a fixed fee.
Related calculators
Corporation tax calculatorOpen calculator →Employed & self-employed tax calculatorOpen calculator →National Insurance calculatorOpen calculator →Capital gains tax calculatorOpen calculator →
These results are estimates for guidance only, based on 2026/27 rates for England, Wales and Northern Ireland. They do not take into account every allowance or relief and are not financial advice. Speak to an accountant before making decisions.
