Director Salary and Dividend Calculator
Extraction details
Company profit after normal business expenses, but before this director's salary, employer National Insurance, employer pension contribution and Corporation Tax.
Annual gross salary from this company.
Quick salary presets
Company contribution — not salary and not a dividend.
For example, salary from another employment, pension income or taxable property income. Non-savings income only — do not include dividends entered elsewhere.
About this calculation
Salary versus dividends
Salary is deductible for Corporation Tax and attracts Income Tax and National Insurance. Dividends are paid from post-tax profit (or brought-forward reserves) and attract dividend tax, but not employee or employer National Insurance. The modelled mix depends on thresholds, Corporation Tax rates, other income and student loans — there is no single salary that always produces the highest take-home. See Director Salary and Dividends Explained for the full extraction picture, and Dividend Tax Explained for personal tax on dividends.
Corporation Tax and director National Insurance
Salary, employer National Insurance and allowable employer pension contributions reduce taxable company profit before Corporation Tax. Dividends do not. For a dedicated company-tax estimate with accounting periods, associated companies and marginal relief, use the Corporation Tax Calculator. This director tool estimates Corporation Tax for a modelled accounting period — not automatically the same as the selected personal tax year. Directors normally use an annual earnings period for Class 1 National Insurance (HMRC CA44). Employer National Insurance is covered in Employer National Insurance Explained, and employer pension costs in Employer Pension Contributions Explained.
Distributable reserves and estimates
A company may only pay dividends from available distributable reserves — the legally distributable profits shown in the accounts, not just this year's cash. This tool models current-period post-tax profit plus any brought-forward reserves you enter — it is not a legal clearance. Results are planning estimates, not an HMRC-approved tax return or accounts package. Personal Income Tax on salary and dividends follows the Income Tax Bands Explained guide.
Important limitations
Advanced options can include associated companies, Employment Allowance offsets and other dividend income, but eligibility and company-law constraints are not verified automatically. Before entering an Employment Allowance figure, read Employment Allowance Explained. Specialist reliefs, benefits in kind and complex group structures sit outside this estimate. For the wider company topic set, start at the Limited Company hub.
Frequently asked questions
What does this director calculator estimate?
It models how company profit becomes personal take-home after salary, employer National Insurance, Corporation Tax and dividends, including dividend tax on the director.
Should I enter turnover or company profit?
Enter company profit after ordinary business expenses — not turnover and not the cash balance in the bank. Ordinary costs already in that profit figure should not be entered again.
Do dividends reduce Corporation Tax?
No. Dividends are paid from post-tax profit or reserves. Salary, employer National Insurance and allowable employer pension contributions can reduce taxable profit; dividends do not.
What is the dividend allowance?
The dividend allowance is the amount of dividend income you can receive each tax year before dividend tax is charged. Dividend income can also use any unused Personal Allowance. Rates depend on your Income Tax band.
Does the calculator apply Employment Allowance automatically?
No. Advanced mode lets you enter an Employment Allowance offset against employer National Insurance, but Sorvuna does not check eligibility. Read Employment Allowance Explained and confirm the claim rules on GOV.UK before relying on the offset.
What does this calculator not include?
It does not verify distributable reserves under company law, model benefits in kind in full, or replace a CT600 or Self Assessment return. Results are planning estimates.
Official sources
Figures are estimates and may differ from payroll, accounts or Self Assessment. See the methodology page for how Sorvuna builds estimates. This is not tax, legal or financial advice.
Looking for employment take-home pay? Open the Income Tax Calculator. Working towards a net salary target? Open the Net to Gross Salary Calculator. Still sole trading? Open the Self-Employed Tax Calculator.
Related guides
- Director Salary and Dividends ExplainedOverview of how owner-directors extract company profit through salary, dividends, pensions and retained profit.Read guide
- Dividend Tax ExplainedHow personal Dividend Tax works — reserves, the dividend allowance, rates and band interaction.Read guide
- Corporation Tax ExplainedHow UK companies calculate taxable profit, apply Corporation Tax rates and meet filing deadlines.Read guide
- Employer National Insurance ExplainedHow employer Class 1 National Insurance is calculated and how it affects the total cost of employment.Read guide
- Employment Allowance ExplainedWhat Employment Allowance is, who can claim it, the single-director rule, and how it offsets employer National Insurance.Read guide
- Employer Pension Contributions ExplainedHow company-paid pension contributions work for tax, National Insurance, Corporation Tax and annual allowance.Read guide
Related calculators
- Corporation Tax CalculatorEstimate UK Corporation Tax using accounting profit, tax adjustments, associated companies and your accounting period.Open calculator
- Income Tax CalculatorEstimate take-home pay, Income Tax and employee National Insurance from a gross salary — with optional pension and student loan settings.Open calculator