Directorly
2026/27
Enter the profit in your limited company and see the most tax efficient way to pay yourself in 2026/27, after corporation tax, dividend tax and National Insurance.
Your turnover minus business costs, before any director salary or dividends. This is the money available to pay yourself.
A sole director with no other employees normally cannot claim it. If you have at least one other employee paid above £5,000, you usually can.
Set your own salary and the breakdown above updates. Leave it on the suggested figure for the most tax efficient result.
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Paying yourself from a limited company has two layers, and most simple calculators only model one. Directorly models both.
Layer one, inside the company. A salary is a business cost, so it reduces the profit your company pays corporation tax on. Employer National Insurance on that salary is also a deductible cost. Whatever profit is left is taxed at corporation tax (19% up to £50,000, then a 26.5% marginal band up to £250,000, then 25%). Only the profit that survives corporation tax can be paid out as dividends.
Layer two, in your hands. Salary uses your Personal Allowance and is subject to income tax and employee National Insurance. Dividends sit on top of your other income, get a £500 allowance, and are then taxed at 10.75%, 35.75% or 39.35% depending on the band they fall in.
The tool tries every salary level from zero upward, runs both layers in full, and reports the salary and dividend mix that leaves the most money in your pocket. It only allows salaries the company can actually fund once employer National Insurance is added, so the figures are real, not optimistic.
For most single directors the best salary is £12,570, the full Personal Allowance. You pay no income tax and no employee National Insurance on it, it counts as a qualifying year towards your State Pension, and the corporation tax saved on the deductible salary normally beats the £1,135.50 of employer National Insurance it triggers. The rest of the money comes out as dividends. At higher profits the Personal Allowance starts to taper away above £100,000 of total income, and at that point a £5,000 salary can occasionally edge ahead. That is exactly why this is calculated for your numbers rather than assumed.
Confirmed against the Autumn 2025 Budget. Figures are for the rest of the UK. Scottish income tax bands differ on salary, and a Scotland mode is planned.
The Autumn 2025 Budget raised the basic and higher dividend rates by 2 percentage points from 6 April 2026.
For most single directors it is £12,570, the full Personal Allowance, with the rest taken as dividends. It is free of income tax and employee National Insurance, counts towards your State Pension, and the corporation tax relief on the salary usually outweighs the £1,135.50 of employer National Insurance. At higher profit levels the Personal Allowance taper can make £5,000 marginally better, so the optimiser checks both for your figures.
Yes. From 6 April 2026 the basic and higher dividend rates rose by 2 percentage points, to 10.75% and 35.75%. The additional rate stayed at 39.35% and the £500 dividend allowance is unchanged. Calculators still using 8.75% and 33.75% are out of date.
Usually not. If the only person earning above the £5,000 secondary threshold is a single director, the company cannot claim the £10,500 Employment Allowance. This changes the employer National Insurance cost and therefore the best split, which is why the optimiser asks.
No. Directorly is a guidance tool that uses published 2026/27 rates. It assumes one company, a full twelve month accounting period, no other personal income, and the rest of the UK income tax bands. Your situation may differ, so check anything important with a qualified accountant before you act.
Directorly is a small, focused set of tax tools for UK limited company directors and contractors, kept current for the 2026/27 tax year. The salary vs dividends optimiser is free and runs entirely in your browser, so nothing you type is stored or sent anywhere. It is built and maintained independently and provided as guidance, not financial advice. For anything complex, speak to a qualified accountant or adviser.