Calculates the tax-efficient salary level for directors, balancing NIC, Income Tax and Corporation Tax.
Shows all taxes paid: Corporation Tax, Income Tax, employee NIC, employer NIC and dividend tax in one view.
Works out the optimal mix of salary and dividends to maximise your net take-home pay from the company.
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For sole directors with no Employment Allowance, the optimal salary is typically the NIC Primary Threshold (£12,570). For directors with EA available, taking salary up to the Secondary Threshold (£5,000 in 2025/26) or higher may be optimal. Always verify with an accountant as individual circumstances vary.
Salary counts as a pensionable earning for State Pension purposes. At minimum, taking a salary equal to the Lower Earnings Limit (£6,396) protects your NI record without paying NIC. Salary is also a deductible expense for Corporation Tax, unlike dividends.
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First £500 of dividends (2024/25+) are tax-free via the Dividend Allowance.
2026/27 higher dividend rate increased to 35.75%. Calculator applies correct rates per year.
Dividends are taxed using remaining basic rate band after other income, matching HMRC treatment.
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After the £500 Dividend Allowance, dividends are taxed at: 10.75% (basic rate band), 35.75% (higher rate), 39.35% (additional rate). Your other income uses up the basic rate band first.
No. Dividends are not subject to National Insurance contributions.
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Your details and calculation results have been sent to our team.
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