Pay Yourself Calculator
For a sole director with no other income. Set your company profit and salary, and we'll work out corporation tax, dividend tax and your real take-home.
Your numbers
The classic strategy is a low salary up to the personal allowance (£12,570), topped up with dividends, minimising National Insurance while keeping the salary deductible against corporation tax.
Illustrative only, based on 2026/27 rates and thresholds for a single-director company with no other income. Assumes salary is deductible for corporation tax and the employment allowance is not claimed. Not tax advice, check with an accountant before filing.
How salary and dividends are taxed differently
Your salary is a deductible business expense, so it reduces your company's profit and therefore its corporation tax bill, but it's subject to Income Tax, employee's National Insurance, and employer's National Insurance above £5,000 a year. Dividends are paid out of profit after corporation tax, so they don't reduce your corporation tax bill, but they carry no National Insurance at all. That's why most sole directors take a low salary, often £9,100 or £12,570, and top up with dividends: it balances the two systems rather than maximising either one on its own.