Salary and dividend calculator 2026/27
For a given company profit, what each split between salary and dividends leaves in your pocket — corporation tax, both National Insurances and income tax included.
Calculator
Profit for the year after every other business cost, but before the director's salary and the employer National Insurance on it.
Everything left after this salary, the employer National Insurance on it and corporation tax is treated as a dividend. This profit covers a salary of at most £70,217, because the company also pays employer National Insurance on top.
Including this one. Associated companies divide the corporation tax limits between them, so two companies reach the main rate at half the profit.
Scottish rates and bands apply to earned income — your salary. Dividend rates are UK-wide. Both still matter here, because your salary decides which band the dividends meet and how the personal allowance is best used.
Pensions are not modelled, and for this decision they are the biggest thing missing. An employer pension contribution is deductible against corporation tax and carries no National Insurance and no income tax on the way in, so for many directors it beats both routes on this page. There is no pension input in the calculation at all — not salary sacrifice, not employer contributions, not relief at source. If any of those apply to you, the figures below are not your answer.
Figures are 2026/27. Nothing you type is transmitted or stored: there is no application server and no database, and the arithmetic runs in this tab. A share link is the exception — it carries your figures in the URL. What that means.
Your salary and dividend split, from profit to pocket
You keep £55,764.87
Of £80,000 of company profit, a salary of £12,570 and a dividend of £52,476 leave £55,764.87 in your hands. The other £24,235.13 is corporation tax, employer National Insurance, income tax and employee National Insurance together — 30.29% of the profit.
Where the money goes
| Step | Amount | Running total |
|---|---|---|
| Company profit before your salary | £80,000.00 | £80,000.00 |
| Less your salary | −£12,570.00 | £67,430.00 |
| Less employer National Insurance on it | −£1,135.50 | £66,294.50 |
| Less corporation tax at 20.84% | −£13,818.05 | £52,476.45 |
| Your income: that dividend of £52,476.45, plus the salary above | £52,476.45 | £65,046.45 |
| Less income tax on salary and dividends | −£9,281.58 | £55,764.87 |
| Less employee National Insurance on the salary | −£0.00 | £55,764.87 |
| In your pocket | £55,764.87 |
The dividend is what is left after corporation tax, which is the step a comparison of “dividend rates against income tax rates” leaves out. Your salary and the employer National Insurance on it are deducted from the company’s profit before that tax is worked out; a dividend is not. This profit sits between the two corporation tax limits, so it is charged at the main rate of 25.00% less marginal relief of £2,755.58 — an effective 20.84%. The rate on the next pound of profit in that band is higher than either headline rate, which is why moving profit out of it through salary can be worth more than it looks.
The split, level by level
Take-home changes in straight lines between the thresholds the tax system sets, so the best split is always at one of them. Every level below is one of those thresholds, priced on your figures.
| Salary level | Salary | Dividend | Total tax | You keep | Against the best |
|---|---|---|---|---|---|
| Dividends only | £0 | £62,550 | £25,839 | £54,160.90 | -£1,603.97 |
| Employer NI threshold | £5,000 | £58,875 | £24,988 | £55,012.21 | -£752.66 |
| Personal allowance (yours) | £12,570 | £52,476 | £24,235 | £55,764.87 | — |
| Profit at the small-profits limit | £26,739 | £40,500 | £25,271 | £54,729.49 | -£1,035.38 |
| Upper earnings limit | £50,270 | £18,581 | £28,169 | £51,831.04 | -£3,933.83 |
| Salary only | £70,217 | £0 | £28,717 | £51,283.48 | -£4,481.39 |
Where the crossover sits
On these figures take-home is highest at a salary of £12,570 — personal allowance — leaving £55,764.87. A salary covered entirely by the personal allowance, so no income tax is due on the salary itself. That is the salary you entered, so nothing in the table beats what you have.
From where you are now, another £1,000 of salary changes what you keep by -£73.07. That is measured by running the whole chain again at the higher salary, not read off a rate: raising the salary cuts the corporation tax bill and the dividend at the same time, and adds employer and employee National Insurance to the total.
Look at the “against the best” column before treating the top row as the answer. Where the levels near the peak are within a few pounds of each other, the tax arithmetic is not what should decide this — the reasons in the panel below are.
The same figures where you live
| Where you live | Income tax | Total tax | You keep |
|---|---|---|---|
| England or Northern Ireland (yours) | £9,281.58 | £24,235.13 | £55,764.87 |
| Scotland | £9,281.58 | £24,235.13 | £55,764.87 |
| Wales | £9,281.58 | £24,235.13 | £55,764.87 |
On the figures you entered the three come out the same, to the penny. That happens whenever the salary is small enough not to meet a rate that differs — it does not generalise, and raising the salary above the personal allowance separates them. Corporation tax and National Insurance are the same across the UK, and dividend rates are UK-wide too. That does not make the answer the same wherever you live, and this is a claim worth being careful with: your salary is taxed at your own region’s rates, and it also decides where the dividends sit in the stack. The personal allowance is then set against whichever income produces the lowest bill — so the same salary and the same dividend can have the allowance used differently in Scotland than in England, and the tables above show the two answers rather than assuming one.
Three reasons the arithmetic is not the decision
- National Insurance buys things. A salary large enough to count for National Insurance builds a qualifying year towards the state pension and towards contribution-based benefits; a dividend builds neither, at any size. Check your own record on gov.uk — Check your State Pension before treating a low salary as free.
- Lenders, statutory pay and cover read salary, not dividends. Mortgage affordability, statutory maternity and paternity pay, and some life and income protection policies are measured on payroll earnings. A split that is a few pounds better on tax can be worse than that by a wide margin in a year when any of them matters.
- Pensions are missing from every figure here. An employer pension contribution is a deductible company cost with no National Insurance and no income tax on the way in, and this calculation has no pension input at all. For many directors it is a cheaper route out of the company than either of the two being compared above.
This page shows what each split costs. It does not tell you which to take, and nothing on it is advice or a recommendation — the arithmetic is one input to a decision that also depends on your pension, your record, your plans for the company and what you need to draw. A figure here is a calculation you can check, not a conclusion about your circumstances.
Worked example: a director splitting 2026/27 company profit
A one-person limited company makes £80,000 of profit in 2026/27 before its director is paid anything, and the director lives in England. Three routes, all of them taking every available pound out of the company in the year:
| Route | Salary | Dividend | Corporation tax | You keep |
|---|---|---|---|---|
| Dividends only | £0 | £62,550 | £17,450.00 | £54,160.90 |
| Salary at the personal allowance, rest as dividends | £12,570 | £52,476 | £13,818.05 | £55,764.87 |
| Salary only | £70,217 | £0 | £0.00 | £51,283.48 |
The middle route is the highest of the 6 levels the calculator compares on these figures, by £1,603.97 against taking no salary at all and £4,481.39 against taking no dividend. Here is where every pound of it goes:
- The salary of £12,570 costs the company £1,135.50 in employer National Insurance on top, so £13,705.50 leaves the profit before any tax is worked out. Both are deductible; a dividend is not.
- That leaves £66,294.50 chargeable to corporation tax, which costs £13,818.05 — an effective 20.84%, because this profit sits between the two limits and is charged at the main rate less marginal relief of £2,755.58.
- £52,476.45 is left to declare as a dividend. This is the step a comparison of dividend rates against income tax rates leaves out, and on these figures it takes 20.84% of the money the dividend would otherwise have been paid from.
- Income tax on the salary and the dividend together comes to £9,281.58. The salary is covered by the personal allowance, so none of it falls on the salary; the dividend is taxed as the top slice of income, starting with £500 at 0%.
- Employee National Insurance is £0.00, because the salary is at the threshold where it starts. The director keeps £55,764.87 of the original £80,000 — 30.29% of the profit goes in tax and National Insurance of one kind or another.
The same company with a director in Scotland keeps £55,764.87 on the middle route — the same figure, because a salary inside the personal allowance never meets a Scottish rate, and £49,329.09 on the salary-only route against £51,283.48 in England. Where the salary is small the region barely matters; where it is large it decides several thousand pounds.
Every figure here is this calculator’s own output on £80,000 of profit in 2026/27, and it assumes the company distributes everything it can and pays into no pension. It is an illustration of the arithmetic, not a suggestion about what to do.
Methodology and sources
The formula
- Employer National Insurance on the salary, which the company pays on top of it. Salary plus employer NI is what the salary costs the company.
- Corporation tax on the profit that is left. Salary and employer NI are deductible, so they reduce this bill; a dividend is a distribution of profit and does not. Between the two limits the main rate applies less marginal relief, which makes the rate on profit in that band higher than either headline rate.
- The dividend — everything remaining after corporation tax, assumed distributed in full in the same year.
- Income tax on salary and dividend together, in the statutory stacking order: non-savings income first, then savings, then dividends on top. The personal allowance is set against whichever income produces the lowest bill, which is what the taxpayer is entitled to (Income Tax Act 2007 s.25(2)).
- Employee National Insurance on the salary. A dividend carries none, at any size.
Take-home is the salary plus the dividend, less income tax and employee National Insurance. The total tax figure is the profit less the take-home, so it includes the corporation tax and the employer National Insurance the company paid — money that never reached the director, and that a comparison stated in personal tax alone leaves invisible.
How the levels in the comparison are chosen
Take-home moves in straight lines between thresholds, so the best split is always at one of them. The calculator prices the corners rather than sweeping a range: the National Insurance thresholds, the personal allowance and its taper, each earned and dividend band, the two corporation tax limits, no salary at all, and the largest salary the profit covers. Corners that fall outside the range this profit can reach are left out rather than shown against a salary they do not describe.
Corporation tax, 2026/27
| Figure | 2026/27 |
|---|---|
| Small profits rate | 19.00% |
| Main rate | 25.00% |
| Lower limit | £50,000 |
| Upper limit | £250,000 |
| Marginal relief, per £1 of profit below the upper limit | 1.500% |
Both limits are divided by the number of companies in the group, which is why the calculator asks. A company with one associate reaches the main rate on half the profit.
National Insurance, 2026/27
| Figure | Threshold | Rate |
|---|---|---|
| Employer (secondary) | £5,000 | 15.00% |
| Employee, main rate | £12,570 | 8.00% |
| Employee, above the upper earnings limit | £50,270 | 2.00% |
Dividend rates, 2026/27
| Band | Taxable income from | Rate |
|---|---|---|
| Dividend allowance | — | 0% on the first £500 |
| Ordinary rate | £0 | 10.75% |
| Upper rate | £37,700 | 35.75% |
| Additional rate | £125,140 | 39.35% |
Region: what is UK-wide and what is not
Corporation tax and National Insurance are UK-wide, and so are the dividend rates above. Scottish rates and bands apply to earned income — the salary — only.
That is not the same as saying dividends are taxed identically wherever you live, and the difference is measurable. On £50,000 of salary with £10,000 of dividends in 2026/27, England taxes £9,230 at 35.75% of the dividend, while Scotland taxes £9,500 at 35.75% — £270 more dividend meeting a rate above zero, on identical income. The rates are the same; what differs is how much of the personal allowance it is worth setting against the salary rather than the dividend, and the Scottish bands change that answer.
Sources
- gov.uk — Corporation Tax rates and reliefs
- gov.uk — National Insurance rates and allowances
- gov.uk — Tax on dividends
- gov.uk — Income tax rates and allowances
- gov.scot — Scottish income tax rates and bands
Contains public sector information licensed under the Open Government Licence v3.0.
What has been verified, and what has not
The rates, thresholds and limits this calculator uses were checked against gov.uk and gov.scot on 12 August 2026, figure by figure. That check covers the published rates only. It does not verify any result this page produces, and no named person has signed the check off yet. Treat the output as a calculation you can check — the breakdown above shows every step for exactly that reason — not as advice, and not as a figure to file a return or set a payroll from without checking it.
What this calculator does not do
- Pensions, in any form. There is no pension input in the calculation. Salary sacrifice, employer contributions and relief at source are all outside it, and an employer contribution is a deductible company cost with no National Insurance and no income tax on the way in. For a director choosing how to be paid, that is the largest thing missing from every figure on this page.
- The employment allowance. Some employers can set an allowance against their employer National Insurance bill; a company whose only employee is a single director is generally not eligible, so it is not modelled here. Check gov.uk — Employment Allowance before assuming either way.
- Retaining profit in the company. Every figure here assumes the whole post-tax profit is distributed in the year it is earned. Leaving it in the company is a third route, with its own consequences, and it is not compared.
- Anything else on either tax return. Other personal income, student loan repayments, benefits in kind, a company car, the high income child benefit charge, capital allowances, R&D relief, loans to participators and IR35 are all outside the model.
- Losses. A salary the profit cannot cover is capped rather than modelled, because loss relief is not something this engine computes.
- Welsh divergence. Wales sets its own earned-income rates and currently matches England and Northern Ireland, so the two answers are identical today. They are modelled separately so that can stop being true safely.
Nothing you type is transmitted or stored — there is no application server and no database. A share link is the exception: it carries your figures in the URL. What that means.
Salary and dividend questions
- Is it better to take a salary or dividends?
Neither is better in general, and the arithmetic is the only part of it this page can answer. On £80,000 of company profit in 2026/27 in England, taking no salary at all leaves £54,160.90, a salary of £12,570 with the rest as dividends leaves £55,764.87, and taking the whole lot as salary leaves £51,283.48. A salary is deductible before corporation tax and carries National Insurance; a dividend is paid out of profit that has already been taxed and carries none. Which route suits you also depends on your pension, your National Insurance record and what lenders and statutory pay schemes will count — none of which is a tax calculation, and none of which this page decides for you.
- Does this calculator include corporation tax?
Yes, and it is the step that changes the answer. A dividend can only be paid out of profit that has already borne corporation tax, while a salary and the employer National Insurance on it are deducted before that tax is worked out. On the £80,000 example, corporation tax on the salary-at-the-allowance route is £13,818.05 — an effective 20.84%. A comparison that sets dividend rates against income tax rates and stops there is missing roughly that much.
- What salary gives the most take-home on £80,000 of profit?
On these example figures — 2026/27, England, one company, everything distributed and no pension — the highest take-home of the levels compared is at a salary of £12,570, leaving £55,764.87. Change the profit, the region or the number of associated companies and the answer moves, which is what the calculator is for. It is also worth reading the "against the best" column before treating that as the answer: several levels are usually within a few pounds of each other, and a difference that small is not what should decide how you are paid.
- Do I pay National Insurance on dividends?
No. Dividends carry no National Insurance of any kind, which is most of the reason the question exists. A salary carries two lots: employee National Insurance, deducted from the salary, and employer National Insurance, which the company pays on top of it. Both are in the figures on this page, and the employer half is the one usually left out elsewhere — it is a cost of the salary even though it never appears on a payslip as a deduction.
- Are dividends taxed differently in Scotland?
The dividend rates and bands are UK-wide, and Scottish rates and bands apply to earned income only — but that does not mean two identical incomes are taxed identically in Edinburgh and in Exeter. The salary is taxed at Scottish rates, and the personal allowance is set against whichever income produces the lowest bill, so the Scottish bands can change how much allowance is worth using against the salary and therefore how much of the dividend meets a rate above zero. The calculator shows the figures for all three regions on your own inputs rather than asking you to take a rule of thumb on trust.
- Does this include pension contributions?
No, and the calculation has no pension input at all — not salary sacrifice, not employer contributions, not relief at source. For a company director this is the most important limitation on the page rather than a footnote: an employer pension contribution is a deductible company cost that carries no employer National Insurance, no employee National Insurance and no income tax on the way in, so it is frequently a cheaper route out of a company than either salary or dividends. If pension contributions are part of your plan, treat everything here as a partial picture.
- Can I pay myself a salary larger than the company profit?
Not on these figures. A salary costs the company the salary plus employer National Insurance on top, so a profit only covers a salary somewhat smaller than itself. Enter a larger one and the calculator caps it at what the profit covers and says so, because paying more than that means the company makes a loss, and loss relief is not something this calculation models.
- Why does the best salary change when I change the profit?
Because the thresholds move relative to each other. The corporation tax limits apply to the profit left after the salary, the personal allowance taper applies to your total income, and the dividend bands apply to the dividend stacked on top of the salary — so raising the profit can put the company into marginal relief, put you into the taper, or push the dividend into a higher band, and each of those changes which level pays best. The comparison table names every level rather than reporting a single figure, so you can see which of them your profit has moved past.