Tax calculators
Director Salary & Dividend Calculator
See the personal tax, National Insurance and dividend tax on a director's salary and dividend combination — and what the salary costs the company.
Net personal income
£47,749
after Income Tax, National Insurance and dividend tax
Total personal deductions: £4,821
Personal position
- Salary
- £12,570
- Dividends
- £40,000
- Income Tax on salary and other income
- £0.00
- Employee National Insurance
- £0.00
- Dividend tax
- £4,821.25
- Total personal deductions
- £4,821.25
- Net personal income
- £47,748.75
- Effective personal tax rate
- 9.2%
Company position
- Employer National Insurance on the salary
- £1,135.50
- Total company cost of the salary
- £13,705.50
- Personal AllowanceReduced where total income exceeds £100,000
- £12,570
Dividend tax band by band
| Band | Rate | Amount | Tax |
|---|---|---|---|
| Dividend allowance | 0.00% | £500.00 | £0.00 |
| Dividend ordinary rate | 10.75% | £37,200.00 | £3,999.00 |
| Dividend upper rate | 35.75% | £2,300.00 | £822.25 |
Employer National Insurance
| Band | Rate | Amount | Tax |
|---|---|---|---|
| Earnings above the Secondary Threshold (£5,000) | 15.00% | £7,570.00 | £1,135.50 |
Where the money goes
- Net personal income — £47,749 (89%)
- Dividend tax — £4,821 (9%)
- Employer NIC — £1,136 (2%)
These calculations are estimates based on the information entered and the tax rates and assumptions shown. They are intended as a general guide and do not constitute tax advice. Your actual tax position may differ depending on your circumstances, reliefs, other income and applicable tax rules.
About this tool
What the director calculator does
Owner-managed companies usually pay their directors through a mixture of salary and dividends. This calculator takes a combination you enter and shows what it means on both sides: the director's personal tax position, and the National Insurance cost falling on the company.
It shows Income Tax on the salary, employee National Insurance, dividend tax band by band, total personal deductions, net personal income, and the employer National Insurance the company pays on the salary.
Method
How the calculation works
Salary and other income are taxed first, with the Personal Allowance set against them. Dividends are added on top and taxed at the dividend rates, using the dividend allowance where it is available.
Employee National Insurance is charged on the salary only. Employer National Insurance for 2026/27 is charged at 15% on salary above £5,000, with the Employment Allowance of £10,500 applied only when you tell the calculator the company qualifies.
Where total income exceeds £100,000, the Personal Allowance taper is applied, which can make an extra dividend far more expensive than the headline rate suggests.
Worked example
£12,570 salary and £40,000 of dividends
A salary of £12,570 uses the full Personal Allowance, so there is no Income Tax on it. There is a small amount of employee National Insurance, since the primary threshold and the Personal Allowance are aligned in this year.
The company pays employer National Insurance at 15% on salary above the £5,000 secondary threshold, which is £1,135.50 on this salary unless the Employment Allowance is available.
The dividends are then taxed on top: £500 covered by the dividend allowance, most of the rest at the ordinary rate, and any excess above the basic rate band at the upper rate. The calculator shows the exact split and the net amount left in the director's hands.
Assumptions
What this calculator assumes
It assumes one directorship, a full tax year, Income Tax rates for England, Wales and Northern Ireland, and that the dividends entered can legally be paid out of distributable profits. It does not model benefits in kind, a company car, director's loan interest, the High Income Child Benefit Charge, or the annual allowance on pension contributions.
To check that the profits exist before the dividends are declared, use the Corporation Tax calculator, and see our tax planning and Corporation Tax services for advice on the combination as a whole.
Rates and assumptions
What this calculator uses
- Tax year shown
- 2026/27
- Geographical scope
- England, Wales and Northern Ireland
- Rates last reviewed
- 19 September 2026
- Source of rates
- HMRC / GOV.UK
Official guidance
- Tax on dividends (GOV.UK)
- Rates and thresholds for employers (GOV.UK)
- Employment Allowance (GOV.UK)
- Running a limited company (GOV.UK)
These calculations are estimates based on the information entered and the tax rates and assumptions shown. They are intended as a general guide and do not constitute tax advice. Your actual tax position may differ depending on your circumstances, reliefs, other income and applicable tax rules.
Questions
Common questions
There is no single answer, and this calculator deliberately does not claim one. The right salary depends on employer National Insurance, Employment Allowance eligibility, whether the company has profits to cover dividends, your State Pension record, pension contributions and other income. What the calculator does is show the consequences of any combination you enter.
Want us to review the most tax-efficient way to pay yourself?
We look at salary, dividends, pension contributions and company profits together, for company directors across Scunthorpe and North Lincolnshire.
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