BahiKhata
Log in

Director extraction · 2025-26

Salary vs Dividend Split Calculator 2025-26

The classic UK Ltd-director question: how much salary, how much dividend, what's left? See PAYE, employee NI, employer NI, corporation tax and dividend tax broken out the way an accountant would model it.

Numbers update on submit · URL captures every input · share the result

Related calculators

Corporation Tax

19% / 25% with marginal relief between £50k and £250k.

Self-Assessment

Sole trader profit + dividend + rental + savings → SA bill.

Director loan (S455)

Loan still outstanding 9 months after year-end? See the 33.75% S455 hit.

Common questions

What's the optimal salary for a UK director in 2025-26?
For most one-person Ltds with no other income, set salary at £12,570 — fully uses the personal allowance, qualifies you for a state pension year, and is corp-tax-deductible. Anything above that is the trade-off this calculator helps you size.
Why does the dividend cost more than its face value?
Dividends are paid from post-corporation-tax profit. To put £10,000 in your hands, the company has to earn ~£12,346 of profit, pay 19% (£2,346) corporation tax, then issue the £10,000 dividend. Salary, by contrast, is a deductible expense — the company pays no corp tax on it.
What if I have employment allowance?
Employment Allowance (£10,500 for 2025-26) only applies if you have at least one other employee on payroll alongside the director — sole-director companies are excluded. If you qualify, subtract it from the employer NI line in the result.
Should I just take it all as dividend?
Usually no. Salary up to the £12,570 personal allowance costs you nothing in income tax (and zero employee NI below the £12,570 primary threshold), saves the company corp tax, and earns a state pension qualifying year. Mixed extraction beats pure dividend in almost every realistic case.
Does this account for the £500 dividend allowance?
Yes. The first £500 of dividend is tax-free regardless of band. After that we apply 8.75% basic, 33.75% higher and 39.35% additional based on your total income placement.