Salary vs Dividend Calculator for UK Company Directors
Compare the tax and take-home pay from salary versus dividends for UK limited company directors.
Use this calculator to compare your take-home pay when extracting money as salary or dividends. This tool focuses on immediate tax costs only — it does not include pensions, employer contributions, or wider financial planning.
What This Calculator Does
This calculator compares director salary and dividend income to help evaluate tax efficiency under current UK rules.
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
Your Numbers
Enter the amount you want to extract and your current income
How much company money are you deciding how to take?
Include salary already taken to determine your tax bracket
Your Comparison
Based on your tax position
Salary allows you to keep £723 more in this comparison
This is a focused comparison
This calculator compares only salary vs dividends for the amount you entered. It does not factor in:
- Pension contributions and tax relief
- Optimal salary up to the NI threshold (£12,570)
- Personal Allowance restoration for £100k+ earners
- Carry-forward pension allowance
Save to Your Financial Plan
Your saved details will pre-fill other calculators automatically so you do not have to re-key information and can access your saved calculations at any time.
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.
What's Next?
Director's Income Planning Guide
Deep-dive into salary, dividend, and pension strategies for company directors
Read GuideAbout the author
Melanie Reed is a fintech and product specialist with 13+ years' experience building mortgage, investment, savings and retirement tools at companies including Aviva, Lendinvest, Money Advice Trust and Luno. She develops calculators and content that simplify complex UK financial decisions, covering pensions, mortgages, tax-efficiency and long-term savings.
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