UK Director Pay & Tax Planner
Salary, dividends, pension, student loans, Scottish tax, Employment Allowance, Child Benefit, profit-allocation chart, full calculation breakdown, education and multi-year forecasting · 2026/27 · runs entirely in your browser
Company
Employment Allowance is not available where the director is the company's only employee.
Director & household
Pension
Student loans
Forecasting
The forecast grows profit, salary and pension by your chosen rates. Tax thresholds, NI thresholds and student-loan thresholds are increased by the inflation assumption. The best salary strategy is recalculated each year.
Advanced rates
Best result
| Item | Annual | Monthly |
|---|---|---|
| Company profit before pay/pension/CT | £80,000 | £6,667 |
| Gross salary | £12,570 | £1,048 |
| Salary sacrificed to pension | £0 | £0 |
| Taxable salary | £12,570 | £1,048 |
| Company pension contribution | £0 | £0 |
| Employer NI after Employment Allowance | £1,136 | £95 |
| Corporation Tax | £14,119 | £1,177 |
| Dividend paid | £53,311 | £4,443 |
| Profit retained in company | £0 | £0 |
| Income Tax | £9,580 | £798 |
| Employee NI | £0 | £0 |
| Student-loan repayments | £0 | £0 |
| Child Benefit charge | £0 | £0 |
| Immediate personal cash | £56,301 | £4,692 |
| Immediate cash + pension contributed | £56,301 | £4,692 |
Student loans
| Loan | Threshold | Rate | Annual repayment |
|---|---|---|---|
| No student loan selected |
Projection: No balance entered. Estimated total repaid from now: £0.
Marginal cost of an extra £1,000
| Extra income | Extra cash retained | Effective marginal cost |
|---|---|---|
| Extra £1,000 gross salary | £998 | 0.2% |
| Extra £1,000 dividend | £1,000 | 0.0% |
Top pay strategies
| Gross salary | Dividend | Pension | CT | Employer NI | Income Tax | Employee NI | Loans | CB charge | Cash now | Cash + pension | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| £12,570 | £53,311 | £0 | £14,119 | £1,136 | £9,580 | £0 | £0 | £0 | £56,301 | £56,301 | Best |
| £20,000 | £47,850 | £0 | £12,150 | £2,250 | £10,971 | £594 | £0 | £0 | £56,284 | £56,284 | |
| £50,270 | £24,081 | £0 | £5,649 | £6,791 | £15,970 | £3,016 | £0 | £0 | £55,365 | £55,365 | |
| £6,708 | £57,620 | £0 | £15,672 | £256 | £11,120 | £0 | £0 | £0 | £53,207 | £53,207 | |
| £0 | £62,550 | £0 | £17,450 | £0 | £12,883 | £0 | £0 | £0 | £49,667 | £49,667 |
Estimate only, not tax advice. Assumes one director/shareholder, annualised figures, no benefits in kind, no director's-loan balance, and no payroll timing effects.
Visual comparison
This chart updates whenever you calculate. It shows how the best strategy allocates the company's profit.
Where the company's profit goes — best strategy
- Salary / taxable pay: £12,570 (13.9%)
- Employer NI: £1,136 (1.3%)
- Corporation Tax: £14,119 (15.6%)
- Personal tax, NI, loans & CB: £9,580 (10.6%)
- Cash to director: £53,311 (58.8%)
"Cash to director" means dividend cash. "Personal tax, NI, loans & CB" includes Income Tax, employee NI, student-loan repayments and the Child Benefit charge.
Calculations & numbers used
This section shows the exact inputs, rates, thresholds and calculation steps behind the best result.
Inputs used
| Setting | Value |
|---|---|
| Personal allowance | £12,570 |
| Dividend allowance | £500 |
| Basic-rate limit above personal allowance | £37,700 |
| Additional-rate threshold | £125,140 |
| Employee NI primary threshold | £12,570 |
| Employee NI upper earnings limit | £50,270 |
| Employee NI main rate | 8.0% |
| Employee NI upper rate | 2.0% |
| Employer NI threshold | £5,000 |
| Employer NI rate | 15.0% |
| Dividend basic rate | 10.8% |
| Dividend higher rate | 35.8% |
| Dividend additional rate | 39.4% |
| Starting rate for savings band | £5,000 |
| Personal savings allowance — basic rate | £1,000 |
| Personal savings allowance — higher rate | £500 |
| Employment Allowance claimed | No |
| Other eligible employee | No |
| Employment Allowance applied | £0 |
| Corporation Tax mode | Automatic — marginal relief |
| Associated companies | 0 |
| Residence | England, Wales or Northern Ireland |
| Retained-profit percentage | 0.0% |
| Salary sacrifice | No |
| Marriage Allowance | No |
Step-by-step result
| Calculation | Amount |
|---|---|
| Company profit before pay, pension and CT | £80,000 |
| Less gross salary | £-12,570 |
| Less employer pension contribution | £-0 |
| Company taxable profit | £67,430 |
| Corporation Tax | £-14,119 |
| Post-tax profit available | £53,311 |
| Less dividend paid | £-53,311 |
| Profit retained in company | £0 |
| Director taxable salary | £12,570 |
| Other earned / rental income | £0 |
| Savings interest | £0 |
| Other dividends | £0 |
| Dividend from this company | £53,311 |
| Adjusted net income | £65,881 |
| Personal allowance after taper | £12,570 |
| Starting rate for savings used | £0 |
| Savings allowance used | £0 |
| Income Tax | £-9,580 |
| Employee NI | £-0 |
| Student-loan repayments | £-0 |
| Child Benefit charge | £-0 |
| Immediate personal cash | £56,301 |
| Pension contributed | £0 |
| Immediate cash plus pension | £56,301 |
Student-loan calculation
| Loan | Relevant income | Threshold | Income above threshold | Rate | Annual repayment |
|---|---|---|---|---|---|
| No student loan selected |
Formulas used
- Company taxable profit = profit − gross salary − employer pension contribution.
- Corporation Tax = 19% below the small-profits limit; 25% above the upper limit; between them, main-rate tax less marginal relief of 3/200 × (upper limit − taxable profit).
- Post-tax profit = taxable profit − Corporation Tax.
- Maximum dividend = post-tax profit × (1 − retained-profit percentage).
- Employer NI = (salary − employer NI threshold) × employer NI rate, less any eligible Employment Allowance.
- Employee NI = 8% of salary between the primary threshold and upper earnings limit, plus 2% above the upper earnings limit.
- Personal allowance taper = £1 removed for every £2 of adjusted net income above £100,000.
- Starting rate for savings = £5,000 band reduced by £1 for each £1 of taxable non-savings income.
- Dividend tax = dividend rates applied after the £500 dividend allowance; the allowance also consumes part of the Income Tax band.
- Savings tax = savings interest less starting rate and personal savings allowance, then taxed using remaining bands.
- Student-loan repayment = rate × (relevant income − plan threshold), separately for each selected loan.
- Child Benefit charge = 1% of Child Benefit per £200 of adjusted net income above £60,000, capped at 100%.
- Immediate personal cash = taxable salary + dividend − Income Tax − employee NI − student loans − Child Benefit charge.
- Cash plus pension = immediate personal cash + employer pension contribution.
Loan projection assumptions
| Assumption | Value |
|---|---|
| Opening balance | £0 |
| Interest rate | 4.1% |
| Years until write-off | 25 |
| Income held constant | £65,881 |
| Projected outcome | No balance entered |
| Estimated repayments from now | £0 |
These are simplified annual calculations. Actual payroll, Self Assessment, pension relief, loan interest and Child Benefit calculations can differ because of timing, coding, benefits and individual circumstances.
What the numbers mean — and what actually benefits you
The "best" result depends on whether you value cash you can spend now, money in a pension, or cash retained inside the company.
1. Company profit
Profit before paying yourself, pension or Corporation Tax. It funds you, your pension, tax and business reserves. Accounting profit is not always bank cash: unpaid invoices, VAT, tax reserves and director's loans can limit safe distributions.
2. Salary
Salary is deductible for Corporation Tax, but can trigger employer and employee NI. It also uses your personal allowance, affects student-loan repayments, supports State Pension qualifying years, and provides documented income for lenders.
3. Employer NI
Paid by the company, not deducted from your pay. It reduces money available for dividends or retention. Employment Allowance may offset some or all of it, but is not available where the director is the company's only employee.
4. Employee NI
Deducted from your salary. It reduces immediate cash but can contribute to your State Pension record and certain state benefits.
5. Corporation Tax
Paid on company taxable profit. Salary and qualifying employer pension contributions reduce it; dividends do not. At 25%, £1 of salary can save 25p of Corporation Tax, though employer NI may offset that saving.
6. Dividends
Paid from post-Corporation-Tax profit. They avoid NI but are personally taxed. They must be covered by distributable reserves and can increase student-loan repayments and adjusted net income.
7. Dividend allowance
The first £500 of dividend income is taxed at 0%, but it still uses up part of your Income Tax band.
8. Pensions
Company pension contributions are usually deductible for Corporation Tax and are not immediately taxable income. They build retirement wealth rather than spendable cash, and salary-sacrifice contributions reduce adjusted net income.
9. Salary sacrifice
You give up gross salary; the company pays it into your pension. This can reduce Income Tax, employee NI, employer NI, student-loan repayments and adjusted net income.
10. Retained profit
Profit left in the company after pay, pension, Corporation Tax and dividends. It is not immediately yours, but supports cash flow, investment, borrowing and future dividends.
11. Student loans
Repayments are based on income above your plan threshold. For directors, relevant income can include salary and dividends. If a loan is likely to be written off, extra repayments may reduce a balance that would later be cancelled.
12. Child Benefit charge
If you or your partner receive Child Benefit and either has adjusted net income above £60,000, some or all is clawed back; fully withdrawn at £80,000.
13. Personal-allowance taper
Above £100,000 adjusted net income, the personal allowance is withdrawn by £1 for every £2 of income.
14. Savings interest
Savings interest can benefit from the £5,000 starting rate for savings (reduced by taxable non-savings income) and the personal savings allowance (£1,000 basic rate / £500 higher rate).
15. Forecasting
The forecast grows company profit, salary and pension by your chosen annual rates. Tax and student-loan thresholds are increased by the inflation assumption. Retained profit stays in the company and earns your assumed return.
16. Marginal rate
The marginal rate is the cost of the next £1,000, not your average rate.
National Insurance thresholds
Employee NI is 8% between £12,570 and £50,270, then 2% above £50,270. Employer NI is 15% above £5,000.
Corporation Tax marginal relief
Corporation Tax = taxable profit × 25% − (3 ÷ 200) × (upper limit − taxable profit)
Dividend tax bands
Salary and other non-dividend income use tax bands first. The £500 dividend allowance is taxed at 0% but still consumes band. Remaining dividends are taxed at 10.75%, 35.75% or 39.35%.
How student-loan repayments are calculated
Repayment = (relevant income − plan threshold) × plan rate
How the Child Benefit charge is calculated
Charge = Child Benefit × percentage withdrawn, where 1% is withdrawn for each £200 above £60,000, up to 100% at £80,000.
How the personal-allowance taper works
Above £100,000 adjusted net income, the personal allowance is reduced by £1 for every £2 of income, reaching zero at £125,140.
How to read the results tables
Best result shows the winning scenario in detail. Top pay strategies ranks salary levels by immediate personal cash. Forecast shows how the best strategy develops over time. Calculations & numbers used shows the underlying inputs, formulas and step-by-step figures.
17. What "best" means
| Priority | Look at | Usually favours |
|---|---|---|
| Maximum cash now | Immediate personal cash | Lowest combined tax, NI, loans and charges |
| Retirement wealth | Cash + pension | Employer pension or salary sacrifice |
| Business resilience | Company retained | Lower dividends, more retained profit |
| Mortgage / borrowing | Documented salary | Stable PAYE salary |
| Long-term growth | Forecast | The strategy with the strongest cumulative cash, pension and company value |
Common traps
- Comparing gross salary and gross dividends as if they were worth the same.
- Claiming Employment Allowance when the director is the only employee.
- Ignoring employer NI, student loans, or Child Benefit effects.
- Paying dividends without distributable reserves.
- Treating pension contributions as immediately accessible cash.
- Assuming future tax thresholds will remain frozen—or assuming they will rise with inflation.
General information only, not personal tax, financial or legal advice.