Free tool
Salary vs Dividend Optimiser
If you run a limited company, see the most tax-efficient way to take your profit as a small salary plus dividends for 2025/26, and what you keep after all the tax.
2025/26, England/Wales/NI. Assumes a single-director company extracting all profit, the tax-efficient £12,570 salary, and dividends from post-corporation-tax profit. Ignores pensions, other income and benefits in kind.
Most tax-efficient extraction
£46,831
net take-home, an effective 21.9% on £60,000 profit
- Salary (£12,570) + dividends (£37,499)
- £50,069
- Corporation tax
- - £8,796
- Employer NIC
- - £1,136
- Income tax + employee NIC
- - £0
- Dividend tax
- - £3,237
- Net take-home
- £46,831
Taking a salary plus dividends keeps about £2,024 more than paying it all as dividends.
- • A single director who is the only employee cannot claim the Employment Allowance, so the £12,570 salary incurs employer NIC (deductible for corporation tax).
- • Pension contributions are often more tax-efficient than salary or dividends and are not modelled here.
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Why salary plus dividends
A small salary up to the £12,570 personal allowance uses your tax-free band, carries no income tax, and (with the salary and employer NIC being deductible) reduces the company's corporation tax. Dividends are then paid from post-corporation-tax profit and taxed at 8.75%, 33.75% or 39.35% depending on your band, after a £500 dividend allowance.
From April 2025, employer NIC rose to 15% with a £5,000 threshold, and a sole director cannot usually claim the Employment Allowance, so the maths is finer than it used to be. Pension contributions are often more efficient still and are not included here.
Get your exact, personal split
Pensions, other income and timing all matter. Book a free clarity call with a Chartered Tax Adviser and we will set your most efficient package.