Profit Extraction Planner — Find the Optimal Salary and Dividend Split
If you run a limited company, the split between salary and dividends directly affects how much tax you pay. Take too much salary and you pay unnecessary National Insurance. Take too little and you may miss out on Corporation Tax relief. This tool lets you drag a salary slider and watch how every tax changes in real time.
How to use
Set your company profit, then drag the salary slider. Watch Corporation Tax, employer NIC, employee NIC, income tax on salary, and dividend tax adjust instantly. The quick comparison buttons show four common strategies side by side. Tick the over State Pension age box if applicable, which removes employee NIC.
Frequently Asked Questions
What is the optimal salary for a company director?
For 2026/27, the most common strategy is a salary at the Personal Allowance level (£12,570). This uses the tax-free allowance, gives a Corporation Tax deduction, and avoids significant NIC. However, the optimal figure depends on whether you have other employees (affecting Employment Allowance eligibility) and whether you are over State Pension age.
Why not take a higher salary?
A higher salary triggers employee NIC at 8% and employer NIC at 15%, which together cost more than the combined Corporation Tax and dividend tax on the same amount. The exception is if you are over State Pension age, where employee NIC does not apply, making a higher salary more attractive.
Does this tool account for pension contributions?
No. Pension contributions made by the company are Corporation Tax deductible and do not attract employer NIC (if structured as employer contributions). This can significantly change the optimal extraction strategy and is worth discussing with an accountant.
What about the Employment Allowance?
The tool does not apply the Employment Allowance (£10,500) because eligibility depends on whether you have other employees. If you do qualify, it reduces employer NIC, which may make a slightly higher salary more efficient. Single-director companies with no other employees cannot claim it.
Need help with your tax planning?
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Book a Free Discovery Call© Imperial Consulting Limited, trading as Grosvenor.Solutions. This tool is for illustrative and educational purposes only. It is not tax advice. Your circumstances may differ. Always consult a qualified professional before making tax decisions. Calculated using 2026/27 HMRC published rates for England, Wales and Northern Ireland.