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Salary vs Dividends:
what's the optimal split?

Enter your company profit. We calculate the tax-optimal salary + dividend combination to maximise your take-home pay.

2025/26 tax rates
NIC + CT + Income Tax included
Instant results
Your Company
£
£0 £80,000 £500k
£
£0 £12,570 £100k
£

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Real-time dividend optimiser, CT calculator, MTD VAT filing, and smart invoicing — all in one platform built for UK Ltd directors.

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Salary vs Dividends: the complete guide for UK directors

Why take dividends instead of salary?

Dividends are taxed at lower rates than salary (8.75% vs 20% basic rate), and there's no National Insurance on dividends. For most Ltd company directors, a combination of low salary + dividends is the most tax-efficient way to extract profit.

The optimal salary for 2025/26

Most accountants recommend a salary of £12,570 (the personal allowance threshold). This uses your full tax-free allowance, costs the company no Employer NIC if eligible for Employment Allowance, and avoids Employee NIC. Some opt for £9,100 (Secondary NIC threshold) to avoid any NIC entirely.

Key 2025/26 rates used in this calculator
Personal Allowance£12,570
Basic Rate (20%)£12,571 – £50,270
Higher Rate (40%)£50,271 – £125,140
Dividend Allowance£500
Dividend Basic Rate8.75%
Dividend Higher Rate33.75%
CT Small Profits (<£50k)19%
CT Main Rate (>£250k)25%
Employer NIC15% above £5,000
Employee NIC8% above £12,570
Employment Allowance£10,500
NIC Upper Earnings£50,270