Director's take-home calculator: salary + dividends (2026/27)

This calculator gives startups an estimate using 2026/27 tax rates.

This is an estimate based on 2026/27 rates and standard assumptions. Your exact position depends on your circumstances, and the result is not personal tax advice.

A common approach is for a limited company director to take a small salary of around £12,570 (free of income tax and deductible for corporation tax) and the rest as dividends, which pay no National Insurance and are taxed at 10.75%, 35.75% or 39.35% after a £500 allowance. This usually gives the lowest total tax on money taken out of a company.

Paying yourself a small salary and dividends

A limited company is a separate legal person, so its profit belongs to the company until you take it out, and the way you take it out decides the tax. For a director who owns shares, the usual approach is a small salary plus dividends:

The salary (around the £12,570 personal allowance) is deductible against corporation tax and normally pays no income tax. A salary at or above the Lower Earnings Limit (£6,708 for 2026/27, or £129 a week) also gives you a qualifying year for your State Pension.
Dividends are paid from profit after corporation tax and pay no National Insurance. They are taxed at 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate) after a £500 allowance. The basic and higher rates each rose by two percentage points on 6 April 2026.

The calculator works out corporation tax on the profit left after your salary, then adds dividend tax on top of the salary to find what you take home.

Overdrawn director's loans Money taken out that is not salary or a properly declared dividend creates an overdrawn director's loan. If a loan made on or after 6 April 2026 is still outstanding nine months and one day after the year end, the company pays a charge of 35.75% under section 455. Plan salary and dividends in advance.

Situations that change the split

Two directors, the Employment Allowance, pension contributions, profits above £50,000 and an upcoming fundraise can all change the best split. This tool gives an estimate. For your exact figures, get a quote.

Common questions

What's the most tax-efficient salary for a company director in 2026/27?

For most directors, about £12,570, which is the personal allowance. It is free of income tax, deductible for corporation tax and counts towards your State Pension record. The rest of your income is then usually taken as dividends.

How are dividends taxed in 2026/27?

After a £500 tax-free allowance: 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band. The ordinary and upper rates each rose two percentage points on 6 April 2026. Dividends pay no National Insurance.

Can I pay myself only in dividends?

You can, but a small salary is usually better, because it is deductible for corporation tax and counts towards your State Pension record. Dividends can also only be paid from profit after corporation tax.

Does this account for corporation tax?

Yes. The calculator deducts corporation tax (19% up to £50,000, 25% above £250,000, with marginal relief between) from profit before working out how much is available as dividends.

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Director's take-home calculator: salary + dividends (2026/27)

Paying yourself a small salary and dividends

Situations that change the split

Common questions

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