UK · Company tax 2026–27
Limited company take-home: salary vs dividends.
Enter your company’s profit and a director salary to see Corporation Tax, employer NI, income tax, dividend tax and what you keep.
Rates checked against GOV.UK and HMRC on 30 September 2026 for the 2026–27 tax year. England, Wales and Northern Ireland rates; a planning estimate, not tax advice.
Your company
Estimate
Enter your profit and salary to see the estimate.
Salary levels compared
Same profit, different salary. Highest take-home is marked.
Worked example
A company makes £80,000 profit before director pay and pays a £12,570 salary. Employer NI is 15% × (12,570 − 5,000) = £1,135.50, leaving £66,294.50 taxable. Corporation Tax with Marginal Relief is 25% × 66,294.50 − 3/200 × (250,000 − 66,294.50) = £13,818.04. The remaining £52,476.46 is paid as dividends: the first £500 is tax-free, £37,200 more is taxed at 10.75%, and the last £14,776.46 at 35.75%, giving £9,281.58 of dividend tax. The director keeps about £55,765 and the salary itself carries no income tax or employee NI at £12,570.
Formula notes
- Corporation Tax: 19% to £50,000, 25% above £250,000, and between them 25% × profit − 3/200 × (£250,000 − profit). Limits shrink with associated companies and short periods; this tool assumes one company and a 12-month year.
- Employer NI: 15% on salary above the £5,000 secondary threshold; Employment Allowance (up to £10,500) only if you confirm eligibility.
- Employee NI: 8% from £12,570 to £50,270, 2% above.
- Income tax: £12,570 Personal Allowance (reduced by £1 per £2 of income over £100,000), 20% on the first £37,700 of taxable income, 40% to £125,140, 45% above.
- Dividends: paid from post-tax profit, stacked on top of salary, £500 allowance, then 10.75% basic, 35.75% higher, 39.35% additional.
Sources, as of 30 September 2026: Corporation Tax rates, HMRC CTM03910 (marginal relief fraction), employer rates and thresholds 2026–27, tax on dividends, Income Tax rates, Employment Allowance eligibility. The 3/200 fraction is listed by HMRC for financial years 2023 to 2025 and is the figure that joins 19% at £50,000 to 25% at £250,000. Not modelled: Scotland, student loans, pension contributions, other income, benefits in kind, Director’s Loan Account, close investment-holding companies, associated companies, IR35 and the retained profit left in the company. All profit after tax is assumed paid out as dividends. Ask an accountant before acting.
FAQ
What salary should a UK limited company director take in 2026-27?
There is no single answer. Common planning points are £5,000 (the employer NI secondary threshold), £6,708 (the lower earnings limit, which keeps a National Insurance qualifying year) and £12,570 (the Personal Allowance). The comparison table shows the take-home at each for your profit.
Why is the Corporation Tax rate between 19% and 25%?
Profits up to £50,000 pay 19% and profits above £250,000 pay 25%. In between, Marginal Relief applies, which gives an effective rate that rises smoothly from 19% to 25%. The limits are reduced for associated companies and short accounting periods.
Can a sole director claim Employment Allowance?
Not if they are the only employee liable for secondary Class 1 National Insurance. GOV.UK says a company with only one director cannot claim when that director is the only such employee. The calculator keeps the allowance off unless you confirm you qualify.
Are dividends taxed twice?
Dividends are paid from profit after Corporation Tax, then taxed on the director personally above the £500 dividend allowance at 10.75%, 35.75% or 39.35% in 2026-27. That is why the calculator shows company and personal tax together.