Dividend vs Salary Split Calculator
Find the standard tax-efficient split between salary and dividends for extracting profit from your limited company.
This affects how much of your Personal Allowance and basic-rate band is still available for your company salary and dividends.
Recommended salary
£12,570.00
Dividends
£47,430.00
Effective personal tax rate on this extraction: 12.46%
This tool assumes a salary of £12,570.00 — the standard optimised level that uses the full Personal Allowance while staying at the NI Primary Threshold, so it attracts no employee National Insurance. It does not include Corporation Tax on the company's profit before extraction (see the Sole Trader vs Limited Company tool for that side of the calculation) and assumes you have no savings or other investment income. Always confirm your extraction strategy with a qualified accountant.
Why salary and dividends are split this way
A salary up to the National Insurance Primary Threshold (£12,570 for 2026/27) is a deductible expense for your company and uses up your full Personal Allowance, while staying exactly at the point where you pay no employee National Insurance on it. Taking more profit as salary beyond this level starts attracting both employee and employer National Insurance, which is usually less efficient than taking the rest as dividends.
Dividends are taxed separately from salary: the first £500 is tax-free each year (the Dividend Allowance), and anything beyond that is taxed at 10.75%, 35.75% or 39.35% depending on which Income Tax band it falls into — calculated after your salary and any other income has already used up part of those bands. If you have other income, such as from a second job or a pension, it reduces how much of the basic-rate band is left for your company dividends, which is why this calculator asks for it.
Comparing structures from scratch? Try our Sole Trader vs Limited Company Optimizer first, or read about extracting profits tax-efficiently.