Director Salary & Dividend Calculator
Unlock the ideal balance of salary, dividends, and pensions. Our real-time calculator uses the latest 2026/27 UK tax rules to maximise your personal wealth.
Total company income before deducting your salary & dividends
Max distributable: £37,499
Claim £10,500 off Employer NICs
Optimisation Tip
You're paying higher Corporation Tax rates. Making an employer pension contribution could drop your taxable profit below £50,000, saving you 19-25% in tax instantly.
Annual cash after all personal taxes
Effective combined tax rate
Including cash and retirement growth
The Art of Profit Extraction
Paying yourself as a UK director is no longer a simple choice. With dividend tax rates rising in April 2026 and thresholds frozen until 2031, the "old" rules of thumb could be costing you thousands in missed opportunities.
Precision Planning
Every £1 over a threshold is taxed differently. We calculate to the penny.
Compliance First
Our logic follows HMRCs 2026/27 stacking rules for total peace of mind.
3 Rules for 2026/27
- The £12,570 Sweet SpotFor most sole directors, £12,570 remains the optimal salary. It maximises CT savings without triggering personal tax or employee NICs.
- Watch the Marginal CT RateProfits between £50k and £250k are taxed at an effective 26.5%. Salary and pensions are your best defense here.
- Pensions are Your WeaponEmployer pension contributions bypass CT, Income Tax, and NICs entirely. They are the single most efficient way to extract value.
Frequently Asked Questions
Why is £12,570 often the best salary?
This matches the 2026/27 Personal Allowance and the Primary Threshold for NICs. You get the maximum Corporation Tax deduction for the company without paying any personal Income Tax or employee National Insurance.
How does the Employment Allowance affect me?
If your company is eligible (usually requiring at least 2 employees/directors paid above thresholds), it wipes out the first £10,500 of Employer NICs. This makes paying higher salaries significantly cheaper for the business.
What happens if I earn over £100,000?
Your Personal Allowance is tapered away (£1 for every £2 over). This creates a '60% tax trap' where your effective tax rate spikes. Our calculator accounts for this tapering effect automatically.
Important Disclaimer
This calculator is for illustrative purposes only and provides estimates based on standard UK 2026/27 tax rules. It does not constitute formal financial or tax advice. Individual circumstances vary, and you should always consult with a qualified accountant before making final remuneration decisions.