Free tool · 2025/26 and 2026/27
Should I take salary or dividends?
If you own and run a limited company, compare what you'd take home from its profit as salary, as dividends, or the common mix of a £12,570 salary with the rest as dividends.
Dividend rates for 2026/27 as announced in the Autumn Budget 2025.
Not if you're a director and the only employee paid above £5,000 a year. The allowance (£10,500) reduces employer National Insurance.
Enter your company's profit for the year to compare the three ways of taking it.
How it works
Salary is a cost for the company, so it saves Corporation Tax, but the company pays employer National Insurance of 15% above £5,000 a year (from 6 April 2025), and you pay Income Tax and employee National Insurance (8% between £12,570 and £50,270, 2% above).
Dividends are paid from profit after Corporation Tax: 19% on profits up to £50,000, 25% over £250,000, and marginal relief in between. There's no National Insurance on dividends. After the £500 dividend allowance, dividends are taxed at 8.75%, 33.75% and 39.35% in 2025/26, and 10.75%, 35.75% and 39.35% in 2026/27.
A salary of £12,570 uses your personal allowance with no Income Tax or employee National Insurance. If you're the only employee, your company can't claim the £10,500 Employment Allowance, so it pays a little employer National Insurance on the salary, but that is usually outweighed by the Corporation Tax it saves.
It leaves out pension contributions, student loans, your other income, Scottish rates, benefits in kind, associated companies and accounting periods that don't match the tax year. Treat it as a guide, not tax advice.
General information, not tax advice. See Corporation Tax rates, Tax on dividends, Rates and thresholds for employers and Employment Allowance on GOV.UK.