Director Salary & Dividend Optimiser 2025/26
Find the most tax-efficient salary and dividend combination for a limited company director in 2025/26. Enter your company profit and take-home target — the calculator shows the optimal split and compares all common strategies side by side.
The optimal salary for a director in 2025/26
The most common approach is to pay a salary at the Primary Threshold (£12,570) — above the Secondary Threshold so the company qualifies the director for NI credits (valuable for State Pension), but below the level where employee or employer NI is triggered. This also uses the full personal allowance, meaning the salary is effectively tax-free.
Any remaining profit needed is then extracted as dividends. Dividends attract a lower tax rate than salary (8.75% basic, 33.75% higher, 39.35% additional) and are not subject to NI. Corporation tax is paid first on company profits, but the combined tax burden is typically lower than employment income.
Secondary Threshold (employer NI kicks in): £5,000 · Primary Threshold (employee NI kicks in): £12,570 · Personal Allowance: £12,570 · Dividend Allowance: £500 · Basic rate band (incl. salary): up to £50,270 · Dividend rates: 8.75% basic, 33.75% higher, 39.35% additional