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Salary vs dividends calculator for directors
Enter a salary and dividends to see a director's income tax, National Insurance, dividend tax and take-home, for 2025/26 and 2026/27 (England, Wales & NI).
Enter a salary and dividends to see a director's income tax, National Insurance, dividend tax and take-home, for 2025/26 and 2026/27 (England, Wales & NI).
Compare different mixes of salary and dividends. Enter a yearly salary and yearly dividends, and the calculator shows the income tax on the salary, employee National Insurance, dividend tax and what you take home, with the employer's National Insurance the company pays on that salary.
It works out the director's own tax. Dividends come from profit after corporation tax, which the calculator does not work out.
The standard Personal Allowance is £12,570. Employee National Insurance is 8% of salary between £12,570 and £50,270 a year, and 2% above that. Employer's National Insurance is 15% of salary above £5,000 a year. The Lower Earnings Limit is £6,708 a year.
Two common salaries are £5,000 and £12,570. £5,000 has no employer's National Insurance, which matters if the company can't claim Employment Allowance, but it is below the Lower Earnings Limit of £6,708, so the year doesn't count towards your State Pension. £12,570 uses the full Personal Allowance. Anything from the Lower Earnings Limit up to £12,570 gives a qualifying year with no employee National Insurance, but 15% employer's National Insurance above £5,000. The best level depends on Employment Allowance eligibility and your profit.
Employment Allowance may cancel out the employer's National Insurance altogether. For 2026 to 2027 it's £10,500. A limited company can't claim it if it has just one director and that director is the only employee liable for secondary Class 1 National Insurance. That includes a company with other staff where the director is the only one paid above the £5,000 secondary threshold.
If you live in Scotland: income tax bands are different in Scotland, and this calculator uses the rates for England, Wales and Northern Ireland.
For the dividend side and a worked comparison, read our guide to director's salary vs dividends for 2026/27.
Every figure here is an estimate for guidance, not personal tax advice.
There isn't one answer. Two common levels are £5,000, with no employer's National Insurance, and £12,570, which uses the full Personal Allowance. £5,000 is below the Lower Earnings Limit of £6,708 for 2026 to 2027, so the year doesn't count towards the State Pension. The best level depends on Employment Allowance eligibility and the company's profit.
Not if the director is the only employee liable for secondary Class 1 National Insurance. That includes a company with other staff where the director is the only one paid above the £5,000 secondary threshold. Once more than one employee or director earns above that threshold, the single-director rule no longer stops the claim, and it covers the whole tax year.
No. It works out the director's own income tax, National Insurance and dividend tax, and the employer's National Insurance on the salary. Dividends are paid from profit after corporation tax, which it does not calculate.
Income tax bands are different in Scotland, and this calculator uses the rates for England, Wales and Northern Ireland, so a Scottish director's tax on salary will differ.
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