Director take-home pay calculator 2026/27
Enter your director salary, dividends and other personal income to estimate how much you keep after Income Tax, dividend tax and National Insurance. The result is shown for the year and for the month.
2026/27 UK ratesRates checked 16/09/2026No sign-up required
What you take
More options
No account. No email required. Your figures stay in your browser.
The full breakdown
Which band your dividends fall in
Salary and other income are taxed first. Dividends sit on top, so they are taxed at whatever band is left.
What happens to your gross income
Built and reviewed by Luvero Accounting
- Reviewed by Dan Edwards FMAAT
- AAT licensed accountancy practice, Bawtry, South Yorkshire
- Tax rates last reviewed 16/09/2026
- How the calculators work
What this calculator works out
It takes the salary and dividends you draw from your company in a tax year, adds any other personal income, and works out the Income Tax, dividend tax and employee National Insurance due on the total. What is left is your take-home, shown for the year and averaged across twelve months.
How the calculation works
Salary and other income are taxed first. They use up the £12,570 Personal Allowance, then fall into the 20 per cent basic rate band, which runs for the next £37,700, then the 40 per cent higher rate band, and from £125,140 of taxable income the 45 per cent additional rate. Employee National Insurance is charged on salary alone, at 8 per cent between £12,570 and £50,270 and 2 per cent above.
Dividends are treated as the top slice of your income. The first £500 is covered by the dividend allowance. The rest is taxed at 10.75 per cent while it sits in the basic rate band, 35.75 per cent in the higher rate band and 39.35 per cent in the additional rate band. So the same dividend can be taxed at three different rates in the same year, and the bands it falls into depend on how much salary and other income sit underneath it.
There is a second step at £100,000. Above that the Personal Allowance is cut by £1 for every £2 of income, which pushes the effective rate on that slice well above the headline rate until the allowance has gone completely at £125,140.
The dividend tax is not deducted at source. It comes out through your Self Assessment return, usually on 31 January after the end of the tax year, with payments on account on top if the bill is large enough. Setting the money aside as you go is the part people most often get wrong.
Under More options you can add a student loan and benefits in kind. A director with dividend income repays a student loan through Self Assessment on total income, salary and dividends together, at 9 per cent above the plan threshold (6 per cent for a postgraduate loan), once unearned income is over £2,000 in the year. Benefits in kind such as a company car or medical insurance are added to your taxable income at their P11D value, so they can push dividends into a higher band, and the company pays Class 1A National Insurance on them at 15 per cent. Neither is cash in your hand, so the calculator deducts the tax and repayments but does not add the benefit to your take-home.
Worked example: £12,570 salary and £50,000 dividends
No other income, England, Wales or Northern Ireland, 2026/27 rates. The salary exactly uses the Personal Allowance, so every pound of dividend is taxable once the £500 allowance is used.
| Salary | £12,570 |
|---|---|
| Dividends | £50,000 |
| Gross income | £62,570 |
| Income Tax on salary (covered by the Personal Allowance) | £0 |
| Dividend allowance, £500 at 0% | £0 |
| £37,200 of dividends at 10.75% (rest of the basic rate band) | £3,999 |
| £12,300 of dividends at 35.75% (higher rate) | £4,397 |
| Dividend tax | £8,396 |
| Employee National Insurance (salary at the threshold) | £0 |
| Total tax | £8,396 |
| Annual take-home | £54,174 |
| Monthly take-home | £4,514 |
The total tax is 13.4 per cent of gross income, but the last £12,300 of dividend carried tax at 35.75 per cent. Keeping total income under £50,270 would have held the whole dividend at 10.75 per cent. Whether that is worth doing depends on what the company would do with the retained profit instead, which is a planning question rather than an arithmetic one.
Take-home pay questions
How are dividends taxed in 2026/27?
The first £500 of dividends in the tax year is covered by the dividend allowance. Above that, dividends are taxed at 10.75 per cent in the basic rate band, 35.75 per cent in the higher rate band and 39.35 per cent in the additional rate band. The ordinary and upper rates each rose by two percentage points on 6 April 2026; the additional rate did not change.
Dividends are taxed as the top slice of income, after salary, pensions, rent and other non-savings income, so the rate you pay depends on everything else you earn in the year.
How much dividend tax will I pay?
Take your total income for the year, work out how much of the Personal Allowance and basic rate band your salary and other income have used, and the dividends are taxed on what is left. With a £12,570 salary the whole £37,700 basic rate band is available: the first £500 of dividend is tax-free, the next £37,200 costs 10.75 per cent, which is £3,999, and anything beyond that costs 35.75 per cent until total income reaches £125,140.
On £50,000 of dividends that comes to £8,396. On £30,000 it would be £3,171. The calculator above shows the split for whatever figures you enter, and the tax is paid through Self Assessment rather than deducted when the dividend is declared.
What happens when my total income exceeds £50,270?
£50,270 is the Personal Allowance plus the basic rate band. Income above it is taxed at the higher rates: 40 per cent on salary and other non-savings income, 35.75 per cent on dividends. Employee National Insurance on salary falls from 8 to 2 per cent at the same point. Because dividends are the top slice it is normally the dividends that cross into the higher rate first.
For a director with a £12,570 salary, that means dividends above £37,700 are taxed at 35.75 per cent rather than 10.75. If you also receive Child Benefit, the High Income Child Benefit Charge starts at £60,000 of income, which this calculator does not include.
What happens when my income exceeds £100,000?
The Personal Allowance is reduced by £1 for every £2 of income above £100,000, and disappears at £125,140. That withdrawal is on top of the tax already charged on the income, so the effective rate on salary in that range is 60 per cent, and on dividends it is well above the 35.75 per cent headline rate. From £125,140 the 45 per cent additional rate applies to salary and 39.35 per cent to dividends.
The calculator shows the reduced allowance in the breakdown when your figures reach this range. Spreading dividends across two tax years, or an employer pension contribution, can change the position, and both are decisions to take with your accountant rather than from a calculator.
Is director salary taxed differently from normal employment income?
Income Tax on a director's salary is the same as for any employee: the Personal Allowance, then 20, 40 and 45 per cent. The difference is in National Insurance. A director's National Insurance is worked out on an annual earnings period rather than pay period by pay period, so a director paid irregularly, or paid a lump sum late in the year, is assessed on the year's total. The thresholds and rates themselves are the same, which is why this calculator applies them to the annual salary.
Do I pay National Insurance on dividends?
No. Dividends are not earnings, so neither employee nor employer National Insurance is due on them. That is the main reason a low salary topped up with dividends usually leaves a director with more than the same amount taken as salary, even though dividends are paid out of profit that has already suffered Corporation Tax. National Insurance is charged only on the salary element.