Salary & Dividend Tax Calculator
See Your Real Take-Home Pay in Seconds
Running a limited company gives you more control over how you pay yourself. Using a combination of salary and dividends can make your remuneration more tax-efficient.
Our Salary and Dividend Tax Calculator helps you quickly work out your dividend income tax and total take-home pay.
This calculator is perfect for self-employed directors who want to plan their finances smarter.
With just a few clicks, you can see the impact of different salary and dividend combinations.
Take the guesswork out of tax planning and make informed decisions for your business and personal income.
Stop overpaying and start optimising your pay structure today.
Calculate Your
Take Home in Seconds
Your Total Income
£00
Your Total Taxable Income
£00
Tax on Salary
£00
Employees NIC (paid by you)
£00
Extra tax to pay on dividends
£00
Employers NIC (paid by company)
£00
Total tax + NICs
£00
Your take home pay
£00
The figures presented here are derived exclusively from the details you’ve supplied and apply specifically to England and Wales. Outcomes may differ based on circumstances not included in this analysis. These computations are intended as illustrative examples only. To receive a customized evaluation tailored to your situation, please contact us for a comprehensive consultation
How Dividends Work?
Keep More of Your Profit
Dividends represent a share of your company’s profits paid to shareholders. As a limited company contractor, you have the freedom to distribute dividends quarterly, twice a year, monthly, or whenever your business has surplus funds.
On top of the £12,570 personal allowance, the first £500 of dividends is completely tax-free, regardless of any other income. This means you could potentially receive up to £13,070 in dividends without paying tax if you have no other taxable income.
If your salary falls between £12,570 and £50,270, it’s taxed at 20%, with an additional 8% National Insurance contribution, totaling 28% on salary earnings. Dividends, however, are generally taxed at lower rates in the basic band, making them a more efficient way to pay yourself.
Dividends are calculated after corporation tax, which ranges from 19%–25% depending on your company’s tax bracket. Unlike salaries, dividend income is not deducted through PAYE; you report it to HMRC via self-assessment at the end of the tax year.
For the 2025/26 tax year, dividend tax rates are:
- £0 – £12,570 | 0% (Personal Allowance)
- £12,571 – £50,270 | 8.75% (Basic Rate)
- £50,271 – £125,140 | 33.75% (Higher Rate)
- Over £125,140 | 39.35% (Additional Rate)
If you want expert guidance on maximising tax efficiency, company setup, or self-assessment filing, get in touch today.
Director Income Challenges We Solve
Unsure if you’re paying too much tax?
We analyse your income structure to reduce unnecessary tax and maximise your take-home pay.
Don’t understand your dividend allowance?
We explain your dividend allowance clearly and ensure you use it efficiently without overpaying tax.
Confused about salary vs. dividend taxation?
We compare salary and dividend tax side by side and structure the most tax-efficient mix for you.
Need to plan your dividend timing?
We help you plan when and how to take dividends based on profits, cash flow, and tax bands.
FAQs
What’s the most tax-efficient salary for a director?
Usually £12,570, as it uses the personal allowance while keeping income tax and National Insurance low.
Do I have to pay National Insurance on dividends?
What is the dividend allowance?
Can I pay myself dividends whenever I want?
What happens if I pay myself a dividend but my company has no profits?
Is dividend tax automatically deducted like PAYE salary tax?
Struggling with Finances?
Let Reflex Accounting Handle It!
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