A clarity tool

Salary vs dividends: what's actually left in your pocket

Enter what your company can afford to pay you this year, try different salary levels, and see the real take-home figure for each — tax, National Insurance and Corporation Tax all accounted for. Uses 2026/27 rates.

This is the total pot available for your pay — before any salary, employer National Insurance or Corporation Tax comes out of it.

Salary: £5,000 a year

You keep Tax, NI & Corporation Tax
Salary£0
Employer National Insurance£0
Corporation Tax on the rest£0
Dividend paid£0
Income Tax on salary£0
Employee National Insurance£0
Dividend Tax£0
You keep£0

How this is worked out

This tool models one company, one director, drawing everything as either salary or dividends, with the whole distributable profit paid out as dividend. It uses 2026/27 tax year rates for England, Wales and Northern Ireland (Scotland has different Income Tax bands — the dividend and National Insurance figures are UK-wide, but the salary Income Tax figure would differ north of the border).

What's included

  • Income Tax on salary: Personal Allowance £12,570, basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above that.
  • Employee National Insurance: 0% to £12,570, 8% to £50,270, 2% above.
  • Employer National Insurance: 15% above £5,000 a year. This tool assumes a single-director company with no other employees, which under current HMRC rules cannot claim the Employment Allowance — so employer NI is not reduced.
  • Corporation Tax on whatever's left after salary and employer NI: 19% up to £50,000 profit, 25% above £250,000, with marginal relief tapering between the two.
  • Dividend Tax: £500 tax-free dividend allowance, then 10.75% basic rate, 35.75% higher rate, 39.35% additional rate, applied on top of whatever band your salary already puts you in.

What's not included

  • Any other income you have, pension contributions, student loan repayments, or the Personal Allowance taper that starts above £100,000 of income.
  • Associated companies, short accounting periods, or anything affecting the Corporation Tax thresholds.
  • Employer pension contributions as an alternative to salary or dividends — often worth a separate conversation.
This is a general guide, not tax advice. It shows what different salary and dividend combinations actually cost and pay out under this year's rules — it doesn't know your full picture, and it isn't a recommendation for your specific situation. Content on this website is general information and does not constitute financial or tax advice. The right mix for you depends on things this tool can't see. Talk it through with Daneon before you act on it.

Rates shown are for the 2026/27 tax year (6 April 2026 to 5 April 2027) and are reviewed each quarter. Last checked: August 2026.