Salary versus dividend calculator

Compare the personal and company tax effects of taking additional salary or dividends.

2026/27Free · No email required

Your figures

Scope and assumptions

Compare drawing money from your company as extra salary or as a dividend, at the 2026/27 rates. The answer is worked two ways: the same amount drawn, and the same amount of company profit. Those are different questions and they can give different answers. Dividend rates rose on 6 April 2026, so a comparison worked out on the rates in force before that date no longer holds. Free, and no email required.

2026/27 rates from GOV.UK: tax on dividends and GOV.UK: income tax rates. National Insurance from GOV.UK: rates and thresholds for employers 2026 to 2027. Corporation tax from GOV.UK: corporation tax rates. Dividend allowance £500; dividend rates 10.75%, 35.75% and 39.35% (2026/27). Income tax 20%, 40% and 45% with a £12,570 personal allowance falling by £1 for every £2 of income above £100,000 (2026/27). Employee National Insurance 8% and 2% above £12,570; employer National Insurance 15% above £5,000; earnings of £6,708 a year or more, which is £129 a week, protect your National Insurance record (2026/27). Corporation tax 19% on profits of £50,000 or less and 25% on profits above £250,000, with Marginal Relief in between making the rate on the next pound of profit 26.5% (financial year to 31 March 2027). The £50,000 and £250,000 limits are divided by the number of associated companies and reduced for accounting periods shorter than 12 months, and a draw that takes the company's profit across one of those limits gets relief at a blend of two rates rather than the single rate shown here. Figures are rounded to the nearest pound. This uses annual Class 1 thresholds for a director in office for the full tax year and standard category A rates. A part-year directorship and other NI categories need a separate calculation. Employment Allowance is excluded; a company with only one director cannot claim it where that director is its only employee liable for employer NI, while other employers may qualify. The corporation tax choice assumes a 12-month period wholly in the financial year to 31 March 2027 and no exempt distributions; associated companies can change the limits as described above. Not modelled: savings interest and the personal savings allowance, the High Income Child Benefit Charge (starts above £60,000 of adjusted net income and reaches full clawback at £80,000, and both routes add to that income, 2026/27), student loan repayments, pension contributions, benefits in kind, the employment allowance, a director over State Pension age, and Scottish income tax rates. This is an estimate for general information, not advice. Your position depends on your circumstances. Speak to us before acting.

Salary you already take

Extra amount you want to draw

Other income before tax (rent, pension, self-employment)

Dividends you already take this year, from this or any company

Company profit for the year, before this draw (corporation tax, financial year to 31 March 2027)

Your estimate

Enter your figures, then calculate to see the result and its breakdown.

Figures checked 5 September 2026.

How to use it

Enter the salary you already take. The starting figure is £12,570, the point at which employee National Insurance begins (2026/27). If you take no salary, enter 0.
Enter the extra amount you want to draw from the company.
Add any other income before tax (rent, pension, self-employment) and any dividends you already take this year, from this company or any other. Both sit in the tax bands before this draw does, so leaving them out makes the answer look better than it is. Leave them blank if there are none.
Choose the band your company's profit falls in. That sets the corporation tax rate, and it changes which route wins, so the company comparison is not shown until you choose.
The result shows what you keep from the same amount drawn, and what you keep from the same amount of company profit.

Dividend rates rose in April 2026

From 6 April 2026 the dividend ordinary rate went from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%. The additional rate stayed at 39.35%. The dividend allowance remains £500.

Any comparison worked out on the rates in force before 6 April 2026 understates the dividend tax. A figure carried over from 2025/26 therefore shows the dividend route in a better light than the current rates support. The figures on this page are the 2026/27 rates, checked on the date shown above.

Why dividends usually still win in your pocket

Dividends carry no National Insurance. Salary carries employee National Insurance at 8% up to £50,270 and 2% above it (2026/27), on top of income tax. That gap is what makes the dividend route look better on the personal side.

Drawn on a £12,570 salary, no other income (2026/27)	Kept as salary	Kept as dividend
£10,000	£7,200	£8,979
£30,000	£21,600	£26,829
£60,000	£40,078	£48,029

Those figures compare the same amount drawn. They are not the same amount of company money, which is the comparison in the next section.

Above £100,000 the allowance taper adds to both routes

The personal allowance falls by £1 for every £2 of income over £100,000 (2026/27). Extra salary and a dividend both count towards that income. So a draw that takes you over the line does two things: it is taxed itself, and it removes part of the allowance that was sheltering the income you already receive, which is then taxed at 40%.

Losing the whole £12,570 allowance at 40% is £5,028 of extra tax on income you were already receiving (2026/27). The result above breaks that out on both routes when it applies, because it falls on either of them.

The company side can reverse the answer

Salary is a deductible expense for corporation tax, and so is the employer National Insurance on it. A dividend is not deductible; it is paid out of profit that has already been taxed.

So £30,000 drawn as salary and £30,000 drawn as a dividend do not cost the company the same. The salary route uses £30,000 plus the employer National Insurance on it, and the company deducts the lot. To pay a £30,000 dividend the company first pays corporation tax on the profit behind it. The calculator takes the profit the salary route uses, runs it through corporation tax, and shows what the dividend route leaves you from the same money.

The rate matters. At 19% the dividend route generally still wins. At 25%, and at the 26.5% that Marginal Relief produces on profits between £50,000 and £250,000 (financial year to 31 March 2027), the salary route often wins once you are a higher-rate taxpayer, even though the dividend still looks better on the same amount drawn. That is why the calculator asks for the profit band rather than assuming one.

Things that change the answer

Dividends can only come from distributable profits. If the company has not made enough profit after tax, a dividend is unlawful, whatever the tax position says.
Salary builds your National Insurance record and your state pension entitlement, but only where your earnings reach the lower earnings limit, £6,708 a year or £129 a week (2026/27). A salary below that does not count towards the year. Dividends do not build the record at any level.
Savings interest is not modelled. It carries its own personal savings allowance and starting rate, so a director with significant interest should treat the figures here as approximate.
Associated companies divide the £50,000 and £250,000 corporation tax limits (financial year to 31 March 2027). Three other associated companies divide them by four, so the main rate starts at £62,500 of profit.
Mortgage lenders often treat salary and dividends differently when assessing affordability.
Pension contributions made by the company carry no National Insurance, and are an allowable expense for corporation tax unless there is a non-trade purpose for the payment. They often beat both routes for money you do not need now.

Common questions

Why is a small salary plus dividends so common?

A salary at around the National Insurance threshold preserves the state pension record and is deductible for corporation tax, while costing little or nothing in National Insurance. The balance is then drawn as dividends, which carry no National Insurance.

Do I need paperwork for a dividend?

Yes. A dividend needs to be properly declared, minuted, and supported by distributable profits at the time it is paid. Dividends drawn without that support can be reclassified, which is an expensive way to find out.

Does this cover Scottish taxpayers?

Not fully. Scottish income tax rates and bands differ for non-savings income, so the salary side would change. Dividend tax is the same across the UK.

What about taking nothing and leaving profit in the company?

That is often the right answer for money you do not need. Profit left in the company is taxed once at corporation tax rates, and can be extracted later, contributed to a pension, or form part of a future capital event.

Method and official sources

Read the calculation guidance above alongside the official sources. Check the scope and assumptions before using your result.

Vision Consulting · Chartered Accountants

Last updated 23 September 2026

Tax assumptions: 2026/27 · Sources checked 23 September 2026

This is an estimate for general information, not advice. Your position depends on your circumstances. Speak to us before acting.