Dividend vs salary calculator — three strategies, side by side.
For an owner-director extracting income from a single-person limited company, the salary-versus-dividend split has a real tax consequence. This compares three common strategies — zero salary, NI-threshold salary, and personal-allowance salary — using 2025/26 rates.
Zero salary
- Salary
- £0
- Employer NI
- £0
- Corporation tax
- £16,125
- Dividend drawn
- £58,875
- PAYE + NI
- £0
- Dividend tax
- £10,277
£6,100 salary
- Salary
- £6,100
- Employer NI
- £0
- Corporation tax
- £14,509
- Dividend drawn
- £54,392
- PAYE + NI
- £0
- Dividend tax
- £8,763
£12,570 salary
- Salary
- £12,570
- Employer NI
- £971
- Corporation tax
- £12,537
- Dividend drawn
- £48,923
- PAYE + NI
- £0
- Dividend tax
- £6,918
Scope: Assumes single director, no other income, no benefits in kind, no pension contributions, and no employment allowance (which doesn't apply to sole-director companies per HMRC rules). A real-world owner-director position with a spouse, pension, or other income will shift the optimum — this shows you the shape, not a filing-ready number.
Net take-home is the only number that matters.
The headline figure at the bottom of each card is net take-home — what actually lands in your personal account after every tax the company and you pay. It's what matters, and it's usually (but not always) highest with the £12,570 personal-allowance strategy — because PAYE on that salary is zero, and the salary reduces corporation tax via the employer NI deduction at a rate higher than the personal NI you pay on it.
The three strategies produce different shapes of tax exposure. Zero salary means more corporation tax up front and more dividend tax later. NI-threshold salary (£6,100, the employer secondary threshold) avoids employer NI but uses less of your personal allowance. Personal-allowance salary (£12,570) uses the full PA and is usually optimal in a simple case — but does trigger employer NI.
Real optimisation goes further: pension contributions (which are both a corporation-tax deduction and personal tax efficient), spouse or partner shareholdings, and timing of dividend declarations across tax years all move the number. That's planning work an accountant does with your full picture in front of them, not something a calculator can finish.
A calculator gives a number. An accountant gives a plan.
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