Salary vs Dividend Calculator(UK Limited Company Directors)
Compare different mixes of salary and dividends to see how they change tax, NI and take-home pay.
Guidance, not advice. This calculator runs the rules as published, it doesn't assess your circumstances. Your actual tax may be affected by factors it doesn't cover (allowances used elsewhere, reliefs, marriage allowance, scheme-specific adjustments). Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →
Profit after all costs except director salary/NIC
Director's annual gross salary from this company
Use 19% for profits under £50k, 25% for £250k+
Add 13.8% employer NIC cost on salary
Scenario Comparison
Compare tax burden and take-home pay across scenarios
| Scenario | Salary | Dividends | Employer NIC | Corporation Tax | Personal Tax | Combined Tax | Net Take-Home | Effective Rate |
|---|---|---|---|---|---|---|---|---|
Scenario 1 Best | £0.00 | £0.00 | - | £0.00 | £0.00 | £0.00 | £0.00 | 0.0% |
Need to compare multiple scenarios?
Use the full tool for Employer NIC, manual dividend amounts and side-by-side comparisons.
How directors are taxed differently
Salary: taxed like employment income
Salary is subject to Income Tax (20%/40%/45%) and Employee National Insurance (8% above £12,570).
Your company also pays Employer NIC (13.8% from April 2025), which reduces the profit available for dividends.
Dividends: lower rates, but paid from post-CT profit
Dividends are taxed at 8.75% (basic), 33.75% (higher) or 39.35% (additional). There is no National Insurance on dividends.
However, they can only be paid from profits after Corporation Tax (19-25%).
The trade-off
Higher salary = more NIC but reduces Corporation Tax. Higher dividends = lower personal rates but paid from CT-taxed profits. The "optimal" split depends on your profit level, personal circumstances and goals.
Our assumptions
Rest-of-UK rates
England, Wales and Northern Ireland. Scottish income tax bands are not included.
UK resident
No overseas tax considerations.
No IR35
Assumes you are outside IR35. If caught by IR35, different rules apply.
Single earner
Director is the sole earner from this company.
No student loan
Quick mode doesn't include student loan deductions.
Simplified scenario
For complex situations with other income, use Full mode.