Dividend vs Salary Calculator
Compare take-home pay from salary only vs salary plus dividends for UK limited company directors. Uses 2025/26 tax rates including the new 15% employer NI rate.
Total you want to draw from the company
Before paying yourself salary or dividends
Optimal split uses salary of £12,570 (personal allowance) with remaining income as dividends. Employer NI rate is 15% from April 2025. Dividend allowance £500. Based on 2025/26 rates. Consult an accountant before making decisions.
How to Use Dividend vs Salary Calculator
- Enter the total income you want to draw from your company this year.
- Enter your company's profit before any salary or dividends.
- The calculator compares salary-only vs the optimal salary and dividends split.
- See the full tax breakdown and your potential saving.
Salary vs Dividends: The Key Difference
Salary is subject to income tax and National Insurance contributions from both the employee and employer. Dividends are paid from company profits after corporation tax, but are not subject to National Insurance. For higher earners, the combined NI saving on dividends (up to 23% when combining employer and employee NI) more than offsets the lack of corporation tax deduction.
2025/26 Tax Rates at a Glance
| Tax Type | On Salary | On Dividends |
|---|---|---|
| Income Tax (basic) | 20% | 8.75% |
| Income Tax (higher) | 40% | 33.75% |
| Employee NI | 8% | 0% |
| Employer NI | 15% | 0% |
| Corporation Tax | Deductible | 19-25% |
Also see the UK Take-Home Pay Calculator for PAYE calculations, or the Redundancy Calculator for statutory redundancy pay.