Director salary and dividend tax calculator

It can be difficult to know what is the best or most tax-efficient way to pay a company director. As a director you have greater flexibility of choice in how you pay yourself and can often do so through a combination of salary and dividends to maximise tax-efficiency.

Unlike a sole-trader, as a director you are legally separate from the limited company, even if you are the owner. As such, you cannot simply keep the profits of the business in the way a sole-trader can.

As a director of your company, you are both an employee and an employer, which matters as both employers and employees pay National Insurance Contributions (NICs) on salary payments. However, there are no NICs on dividend payments.

To optimise tax-efficiency, paying yourself as a director is all about maximising tax reliefs and tax rate thresholds between salary and dividend payments.

To keep things simple, we have created the below director salary and dividend calculator you can use, for free.

Simply click on the link and follow the instructions within to find out the most tax-efficient way to pay yourself as a company director.