Dividend vs Salary Calculator.
Both extraction routes computed side by side — company and personal tax together.
All salary
Salary + dividends
Compares extracting the full amount as salary against a salary-plus-dividends blend, including employer NI and Corporation Tax at 2026/27 rates (dividend rates 10.75% / 35.75% / 39.35%). Real planning also weighs pensions, other income and timing — Everything runs in your browser — your figures never leave it. Estimates are general information, not advice: ask us about your own position.
The director's question
Two roads out of the company, priced honestly.
Every owner-director eventually asks it: salary or dividends? The honest answer is arithmetic, not folklore — because the folklore predates April 2026, when dividend rates rose to 10.75%, 35.75% and 39.35%. This calculator prices both routes completely: the all-salary path with its employer National Insurance at 15%, and the blended path where profit bears 19–25% Corporation Tax first and dividends carry their own tax after. Same pot of profit in, two “you keep” figures out.
The classic structure — a salary around the £12,570 allowance, dividends above it — still usually wins, but by less than it used to, and the details move the answer: the Employment Allowance (worth up to £10,500 against employer NI, but not for most single-director companies), the Corporation Tax band your profit sits in, and what a salary does for pension headroom and state pension credits that dividends never do.
Treat the result as the start of the conversation. The full picture — pensions, spouse shareholdings, retained profit, mortgage applications — is exactly what a remuneration planning session is for.
Common questions.
Why do accountants suggest a £12,570 salary?
It matches the personal allowance, so no Income Tax; it sits above the threshold that earns state pension credits; and it is deductible against Corporation Tax. A small employer NI charge arises above £5,000, but the CT saving usually outweighs it. Above that level, dividends have typically been the cheaper top-up — though the April 2026 rate rise narrowed the gap.
What changed for dividends in April 2026?
The ordinary and upper dividend rates rose by two percentage points to 10.75% and 35.75% (the additional rate stayed at 39.35%), and the dividend allowance remains £500. Extraction maths done before April 2026 is out of date — re-run it.
Are dividends always cheaper than salary?
No. Dividends are paid from post-Corporation-Tax profit, so the company's 19–26.5% comes first. For profits in the marginal relief band, or where the Employment Allowance covers employer NI, or where pension contributions matter, the answer can shift. That is why this calculator prices the whole chain, not just the personal tax.
Can I just take dividends and no salary?
You can, but you may waste your personal allowance and miss a qualifying year for the state pension — and dividends require distributable reserves and proper paperwork. Most efficient structures keep a small salary in place. Also remember: dividends must follow shareholdings, which is why share structure planning matters.
Keep going.
Dividend Voucher Generator
Decided the dividend? Paper it properly — voucher and board minute, autofilled from Companies House.
Open →Dividend Tax Calculator
Just the personal side: dividends stacked on your salary, band by band.
Open →Corporation Tax Calculator
The company's share of the journey — including marginal relief.
Open →Prefer a human with the numbers?
Remuneration planning is the single most common thing new director clients ask us — and the numbers are personal every time.