Compare salary-only vs salary + dividends for your limited company. Find the most tax-efficient director remuneration structure.
This calculator compares the tax efficiency of taking income as salary versus dividends for UK limited company directors. It helps you find the optimal salary/dividend split to minimise your overall tax burden.
Note: Based on 2026/27 HMRC rates. The most tax-efficient approach for most directors is a salary at the NIC secondary threshold (£9,100) with the remainder as dividends.
A salary at £12,570 combined with dividends is typically the most tax-efficient structure. Employment Allowance of £10,500 offsets employer NIC for most small companies.
| Allowance (£500) | 0% |
| Basic Rate | 10.75% |
| Higher Rate | 35.75% |
| Additional Rate | 39.35% |
Taking a salary at £12,570 and topping up with dividends avoids National Insurance on the dividend portion. This is typically the most tax-efficient structure for director-shareholders.
The first £500 of dividends is tax-free. Above this, basic-rate taxpayers pay 10.75% and higher-rate taxpayers pay 35.75% on dividends in 2026/27.
A lower salary reduces State Pension entitlement and statutory benefit eligibility. Always consult an accountant before changing your remuneration structure.