Compare salary and dividend combinations for a UK limited company director. This calculator estimates PAYE income tax, employee National Insurance, employer National Insurance, corporation tax, dividend tax and overall take-home pay.
Enter the company profit, salary and dividend details below to estimate the possible tax impact and take-home pay. The result should be treated as a guide because real payroll and tax outcomes can vary.
Estimate only for UK limited-company with a single director/shareholder. PAYE salary + dividends only. Not tax advice.
This tool helps compare how salary and dividends may affect estimated take-home pay for a UK limited company director/shareholder.
The calculator does not cover every situation, such as multiple shareholders, benefits in kind, pension planning, student loans, director loan accounts or personal tax complexities.
A limited company director can usually take money from their company in more than one way. The most common approach is a mixture of salary and dividends, although the right position depends on the company, the director’s personal circumstances and the available post-tax profits.
Salary is normally processed through PAYE and can create income tax, employee National Insurance and employer National Insurance. Dividends are paid from company profits after corporation tax and are then taxed personally under the dividend tax rules.
This calculator brings those moving parts together so you can compare the broad impact of different salary and dividend combinations in one place.
The calculator assumes one UK limited company, salary paid through PAYE, dividends paid from available post-corporation-tax profits and a simplified approach to corporation tax where marginal relief may be relevant.
The calculator estimates income tax, employee National Insurance and dividend tax. It does not attempt to cover every personal tax adjustment, relief, student loan deduction or tax code variation.
Salary can reduce company profit before corporation tax, but it may also create PAYE and National Insurance liabilities. The calculator compares these effects to estimate the overall position.
Dividends are generally paid from profits remaining after corporation tax. The calculator estimates the personal dividend tax due after applying the relevant allowance and tax bands.
The example below shows the kind of comparison a company director may want to make. The exact result depends on the figures entered into the calculator and the tax year selected.
| Item | What it means |
|---|---|
| Company profit before salary | The profit available before deducting the director’s salary. |
| Director salary | The salary processed through PAYE and deducted from company profit. |
| Corporation tax | The company tax due on taxable company profits after allowable deductions. |
| Dividends available | The estimated profits available for dividend distribution after corporation tax. |
| Personal tax | The estimated income tax, National Insurance and dividend tax position. |
| Estimated take-home pay | The estimated amount remaining after the taxes included in the calculation. |
Salary and dividends are not treated in the same way for UK tax. Salary is an employment cost for the company and is normally subject to PAYE rules. Dividends are distributions of company profit and can only usually be paid where there are sufficient distributable profits.
This is why changing the salary figure can affect more than one tax result. A higher salary may reduce corporation tax, but it may also increase PAYE and National Insurance. A lower salary may reduce payroll taxes, but it can leave more profit inside the company before corporation tax and dividends are considered.
A different tax code can change the PAYE result. The calculator uses standard assumptions and may not reflect your actual payroll record.
Other employment income, rental income, savings interest or dividends from elsewhere can affect the personal tax bands available.
Multiple shareholders, previous losses, associated companies and other adjustments can change the corporation tax and dividend position.
UK tax rates and thresholds can change. For important decisions, check the latest official guidance and speak to an accountant or tax adviser where needed. Useful official references include GOV.UK pages for income tax, National Insurance, corporation tax and dividend tax.
This calculator is for general information only and provides an estimate based on simplified assumptions. It is not tax advice, financial advice or a recommendation on how to pay yourself from a limited company. Tax outcomes can vary depending on your company, tax code, other income, pension arrangements, benefits, student loans, shareholders and wider circumstances. Speak to a qualified accountant or tax adviser before making decisions based on the results.
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