Salary & Dividend Optimiser
Find the most tax-efficient mix of salary and dividends for a UK limited company director. Uses current 2025/26 thresholds and rates.
Your inputs
Optimal extraction
Salary
£12,570
Dividend
£82,711
Director net take-home
£76,960
The tax breakdown
- Corporation tax
- £24,719
- Employer NI
- £0
- Employee NI
- £0
- Income tax (on salary)
- £0
- Dividend tax
- £18,321
- Total tax
- £43,040
Compared to other strategies
- vs all-salary extraction
- +£719
- vs zero-salary, all-dividend
- +£2,207
That strategy nets £76,241. Optimal nets £76,960.
That strategy nets £74,753. Optimal nets £76,960.
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 13.8% above secondary threshold (£9,100). 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.
Want a tailored extraction model for your agency?
Book a free call. We will model your actual position factoring in pensions, other income, retained earnings and your exit timeline.
Book a free call