Salary vs Dividends: Optimal Split for Company Directors 2026/27
Compares a £5,000 and a £12,570 salary, with the employer National Insurance each one costs.
Read guide →In-depth UK dividend tax guidance for contractors, directors, investors and retirees, covering 2026/27 rates and planning strategies.
The blog holds longer, single-topic articles on dividend tax for the 2026/27 tax year. Each works through one situation with figures, using the same rates as the calculators: the £500 dividend allowance, then 10.75%, 35.75% and 39.35%. Articles are grouped below by the question they answer, with a line on what each one adds.
For a quick number, use the calculators. For the rules on a specific point, such as how to declare a dividend or which tax year a dividend falls in, the guides section is usually the shorter read.
Salary, dividends and Corporation Tax for owner-directors.
Compares a £5,000 and a £12,570 salary, with the employer National Insurance each one costs.
Read guide →Works the split through at several profit levels, including where Corporation Tax marginal relief bites.
Read guide →The longest director article: salary, dividends, Corporation Tax and the paperwork in one place.
Read guide →A shorter overview for new directors of how salary plus dividends is taxed.
Read guide →How a pension contribution moves dividends from the 35.75% band back to 10.75%.
Read guide →Worked examples at specific amounts.
Five common situations, from a basic-rate employee to an additional-rate earner.
Read guide →One amount, £50,000 of dividends, with no other income and on top of a £30,000 salary.
Read guide →The legitimate ways to reduce the bill: ISAs, pension contributions, the allowance and the basic-rate band.
Read guide →Why Welsh taxpayers pay the same dividend tax as England, and what the Welsh Rate of Income Tax covers.
Read guide →Shares and funds held outside an ISA or pension.
How tax on a general investment account builds up as the portfolio grows.
Read guide →The same holdings inside and outside an ISA, side by side.
Read guide →When taking income as dividends costs less than taking it as gains, and when it costs more.
Read guide →Withholding tax abroad, treaty rates and claiming the credit on the Foreign pages.
Read guide →How the rules got here.
The allowance and rates year by year since April 2016, and what each cut meant for shareholders.
Read guide →Reviewed by the UKDividendTaxCalculator team.
Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us