How our tax calculators work

Who maintains the calculators

The calculators are built and maintained by Luvero Accounting Ltd, an accountancy practice in Bawtry, South Yorkshire, licensed and regulated by AAT under licence number 10113057. The tax content and every rate is reviewed by Dan Edwards FMAAT, the practice's director. A second member of the team owns the diary: the rates are re-checked on 6 April each year and after every Budget or fiscal statement.

Tax years covered

2025/26 and 2026/27 for personal tax, and the Corporation Tax financial years starting 1 April 2025 and 1 April 2026. The default on every calculator is 2026/27. The rates were last checked against GOV.UK on , and that date is repeated at the foot of every calculator.

Sources

Every rate and threshold is taken from GOV.UK and HMRC guidance. The pages used are:

• Income Tax rates and allowances
• Tax on dividends, and the HMRC technical note on the dividend rate changes from 6 April 2026
• Rates and thresholds for employers 2026 to 2027
• Corporation Tax rates and allowances
• Marginal relief for Corporation Tax
• HMRC Company Taxation Manual on associated companies
• Rates and allowances: National Insurance contributions, for Class 2 and Class 4
• Repaying your student loan: what you pay, with the thresholds from the employer rates pages above
• Tax on company benefits

All the figures live in one file, so a change to a rate is made once and flows through every calculator. A set of automated checks compares the engine's output with answers worked out by hand and is re-run whenever anything changes.

The assumptions, calculator by calculator

Rounding

Calculations are carried out in pounds and pence without rounding at each step. Figures on screen are rounded to the nearest pound for display, so a table may appear to be out by £1. Percentages are shown to one or two decimal places. HMRC's own computations round some figures differently, so a filed return can differ by a few pounds.

Corporation Tax

Small profits rate 19 per cent on taxable profits up to £50,000. Main rate 25 per cent on profits of £250,000 and above. Between the limits, tax at the main rate less marginal relief. The profit you enter is treated as the taxable total profit after capital allowances, disallowed expenses and losses. Corporation Tax is UK-wide, so the Scotland point below does not apply to it.

Marginal relief

Relief is 3/200 multiplied by the difference between the upper limit and the profit. Augmented profits (profits plus dividends from companies outside the group) are not modelled. Where such dividends exist, HMRC's formula uses augmented profits and the relief is smaller than shown.

Associated companies

On the Corporation Tax calculator you can enter the number of associated companies, counting the company itself, up to six. Both limits are divided by that number. The salary vs dividend and pay myself calculators assume one company with no associates. Whether two companies are associated is a question of control and, for close relatives, commercial interdependence, and should be confirmed by an accountant.

Accounting periods

The Corporation Tax calculator assumes a 12 month accounting period unless you enter start and end dates. For a shorter period both limits are multiplied by the number of days in the period divided by 365, following section 24 of the Corporation Tax Act 2010. A period of 365 or 366 days is treated as a full year. A period longer than 12 months is not split into two as the law requires; the full limits are used and a note says so. A period straddling 1 April is not apportioned between financial years because the rates are identical in both years the site covers. This will need revisiting if the rates change.

Income Tax

Personal Allowance of £12,570, reduced by £1 for every £2 of income above £100,000 and nil from £125,140. Basic rate 20 per cent on the first £37,700 of taxable income, higher rate 40 per cent to £125,140, additional rate 45 per cent above. Income is taxed in the statutory order: salary and other non-savings income first, dividends as the top slice. Allowances taxed at 0 per cent still use up band width. The "other income" box is treated as non-savings income such as rent, a pension or another employment; savings interest and its allowances are not modelled.

National Insurance

Employee Class 1 at 8 per cent on salary between £12,570 and £50,270 and 2 per cent above, worked out on the annual salary as it is for a director. Employer Class 1 at 15 per cent on salary above £5,000. No National Insurance on dividends. Class 2 and Class 4 are modelled only in the sole trader comparison. Class 1A on benefits is modelled only in the director take-home, director's loan and company car calculators.

Dividend tax

Dividend allowance of £500, taxed at 0 per cent but using band width. Ordinary rate 10.75 per cent, upper rate 35.75 per cent, additional rate 39.35 per cent for 2026/27; 8.75, 33.75 and 39.35 per cent for 2025/26. Dividends are assumed to be properly declared out of distributable reserves.

Employment Allowance

£10,500 for 2026/27, deducted from employer National Insurance where you tick the box. The calculator does not test eligibility. A company whose only employee paid above the secondary threshold is a director cannot claim it, and the box on each calculator says so.

Pension contributions

An employer pension contribution can be entered under More options on the salary vs dividend and pay myself calculators. It is treated as wholly deductible for Corporation Tax and free of employer and employee National Insurance, which is the normal position for a qualifying contribution. The annual allowance, its taper for high earners and carry forward are not checked. Because a contribution is deferred money rather than income now, it is shown separately and never added to take-home. Personal pension contributions are not modelled.

Student loan repayments

On the director take-home calculator only. Repayments are worked out as HMRC collects them through Self Assessment for someone with dividend income: 9 per cent of total income above the plan threshold (Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000 for 2026/27), plus 6 per cent above £21,000 for a postgraduate loan. Salary and benefits always count; dividends, rent and other unearned income count in full once they exceed £2,000 in the year and not at all below that. Plan 5 loans were not repayable before April 2026, so no repayment is shown for 2025/26. Any repayments already taken through payroll are not netted off.

Benefits in kind

On the director take-home calculator only. The taxable value you enter is added to salary as employment income, so it uses allowance and band width before the dividends, and Class 1A National Insurance at 15 per cent is shown as a company cost. No employee National Insurance is charged on it. The calculator does not value a benefit for you: the P11D figure for a car, fuel, a loan or medical insurance has to be worked out separately.

Salary vs dividend comparison

The calculator tests a fixed set of salary levels: nil, £5,000, £9,100, £12,570, and any salary you enter yourself. It assumes all profit remaining after Corporation Tax is paid out as a dividend in the same year. The highlighted row is simply the one that leaves the most after tax on the figures entered. It is not a recommendation.

How much can I pay myself

For each candidate salary, the dividend needed to reach the target take-home is found by iteration to within £1. The company profit shown is the salary, plus employer National Insurance, plus the pre-tax profit that leaves exactly that dividend after Corporation Tax at the rate applying to that profit level, plus any employer pension contribution. The lowest-cost route is shown first.

Sole trader vs limited company

The sole trader side taxes the whole profit as non-savings income after any other income, and deducts Class 4 National Insurance at 6 per cent between £12,570 and £50,270 and 2 per cent above. Class 2 is not deducted: from the Small Profits Threshold (£7,105 in 2026/27, £6,845 in 2025/26) it is treated as paid, and below that it is voluntary at £3.65 a week (£3.50 in 2025/26), which the page notes but does not charge. The company side deducts any extra running cost you enter and the salary you choose, charges employer National Insurance and Corporation Tax, retains any amount you ask it to, and pays the rest out as dividend. Where the salary would exceed the profit available it is reduced to fit. The comparison figure for the company is the director's take-home plus any profit retained after Corporation Tax, because the sole trader has been taxed on all of the profit. Retained profit is netted at the basic dividend rate (10.75 per cent in 2026/27, 8.75 per cent in 2025/26), on the assumption that it is drawn in a later year inside the basic band; it is not treated as tax-free. The crossing points are found by scanning profit from £10,000 to £500,000 in £250 steps and bisecting each change of sign to within £1. The transfer of an existing business into a company is not modelled.

Dividend tax calculator

The same engine as the take-home calculator, showing only the dividend part. Dividends are placed on top of salary and other income, the allowance is applied, and each slice is taxed at the dividend rate for its band. The rate on the next £1 is found by recalculating with £1 more dividend. The headroom figures are the distance from total income to £50,270, £100,000 and £125,140.

Employer National Insurance calculator

Each salary entered is charged at 15 per cent on the part above the £5,000 secondary threshold. The Employment Allowance, £10,500, is set against the total and capped at the liability. Whether the company is entitled to it is a question the page asks (a director who is the only person paid above the threshold cannot claim) but does not police: the £100,000 prior-year test, connected companies and the de minimis state aid rules are for the accountant. The reduced rates for employees under 21, apprentices under 25, veterans and Freeport or Investment Zone employees are not modelled, and salaries are taken as spread evenly across the year, so the directors' annual earnings period makes no difference.

Director's loan calculator

The loan is taken as a single balance outstanding for the whole tax year. The s455 charge is that balance at 35.75 per cent (33.75 per cent for loans made before 6 April 2026) unless the page is told it will be repaid within 9 months and 1 day of the accounting date, which is also the date the charge is due. Where the balance is over £10,000 the benefit in kind is the balance at HMRC's official rate of 3.75 per cent less any interest the director pays, taxed as non-savings income on top of salary, with Class 1A at 15 per cent for the company. The dividend to clear the loan is the same amount as the loan, and its tax is the difference in the director's bill with and without it. HMRC's averaging method for a moving balance, bed and breakfasting, and loans written off are described on the page but not calculated.

Company car vs car allowance

The car benefit is list price less a capital contribution of up to £5,000, times the appropriate percentage from 480 Appendix 2 for cars registered from 6 April 2020, less any private use payment. Electric cars are 4 per cent in 2026/27 (3 per cent in 2025/26), 1 to 50g cars sit on the electric range table, and petrol cars run from 17 per cent at 51g to 37 per cent at 155g. Diesels that do not meet RDE2 add four points, capped at 37. Private fuel adds the fixed figure of £29,200 (£28,200 in 2025/26) at the same percentage. The benefit is taxed as non-savings income above salary, so it can push dividends into a higher band, and the company pays Class 1A at 15 per cent. The car allowance is taxed as salary with employee and employer National Insurance at the margin; business mileage paid below the approved 55p and 25p rates (45p in 2025/26) earns mileage allowance relief, and mileage paid above them is taxed. What the car costs the company to buy, lease and run, capital allowances and VAT are outside the calculator.

What is not included

• Scottish income tax rates and bands (see below)
• Savings interest, the starting rate for savings and the personal savings allowance
• Capital gains, including on a winding up
• Student loan repayments, except on the director take-home calculator
• The High Income Child Benefit Charge
• Personal pension contributions, and the annual allowance and its taper on employer contributions
• Benefits in kind other than a company car, private fuel and a director's loan, and the valuation of any other benefit
• Class 1A National Insurance, except as a company cost on the take-home, director's loan and company car calculators
• The company's cost of buying, leasing, insuring and running a car, and capital allowances on it
• Moving an existing sole trader business into a company: goodwill, stock, equipment, losses and VAT
• Losses, capital allowances, research and development relief and other Corporation Tax adjustments
• Dividend income received by the company, and its effect on marginal relief
• Gift Aid and other reliefs that extend the basic rate band
• Payments on account and the timing of tax payments

Any of these can move a real computation away from the figure shown. That is why every result is described as indicative and why the disclaimer on each page asks you to confirm your position with your accountant before acting.

Scotland

Scottish taxpayers pay Income Tax on salary and other non-savings income at Scottish rates and bands, which differ from the rest of the UK. Dividend tax and National Insurance are UK-wide, as is Corporation Tax. The calculators currently use the rates for England, Wales and Northern Ireland only and say so on every page. A region selector is planned once the core calculators have settled.

How updates happen

Rates are changed in one place, the automated checks are re-run against hand-worked answers, the reviewer signs off the rates sheet, and only then is the site republished. The "rates checked" date on every page changes at the same time. If you spot a figure you believe is wrong, email [email protected] and say which calculator and which input; a real person reads it.

Disclaimer

The calculators give indicative figures to help you understand how the tax works. They are not tax advice, not a personal recommendation, and cannot take account of your full circumstances. Nothing you type into a calculator is stored or sent anywhere: the calculations run entirely in your browser. If you choose to leave your details in the form below a result, those go to us so we can reply. Confirm your position with your accountant before you make a decision. Luvero Accounting Ltd is registered in England, company number 10972036. Our terms of use and privacy notice apply.