Salary vs Dividend Calculator for UK Company Directors

Compares take-home pay when extracting money as salary or dividends

Does not include pension contributions, employer NI savings from salary sacrifice, or long-term tax planning

Focused comparison to help you understand the immediate tax cost of each option

For comprehensive income extraction planning including pensions and salary sacrifice, try the Director Income Planner.

Your Numbers

Enter the amount you want to extract and your current income

Your Comparison

Based on your tax position

How Salary vs Dividend Works

As a UK company director, you have two main ways to extract money from your company: salary or dividends. Each has different tax implications.

Salary: The company pays employer National Insurance (13.8% above £9,100). You then pay income tax and employee NI on what you receive. Salary is a business expense, reducing corporation tax.

Dividends: The company pays 25% corporation tax on profits first. The remaining profit can be paid as dividends. You pay dividend tax on what you receive (0% on first £500, then 8.75%, 33.75%, or 39.35% depending on your tax band).

Which is better? For lower incomes, salary up to the NI threshold (£12,570) is usually best. Beyond that, dividends often win because combined CT + dividend tax is less than income tax + NI. But it depends on your specific numbers.