Scenario comparison(per director)
Tax Breakdown
Custom
Director salary (per director)
£12,570
Number of directors
2
Total director salaries
£25,140
Employer NIC per director
Earnings above secondary threshold (£12,570 − £5,000)
£7,570
At 15.0%
£1,136
Total director employer NIC
£2,271
Employment Allowance
EA available (annual)
£10,500
Staff employer NICs (already in pre-extraction profit)
£35,000
EA consumed by staff NICs
£10,500
Residual EA for director NICs
£0
Employer NIC payable (after EA)
£2,271
Total pension contributions
£0
Taxable profit
Pre-extraction profit
£550,000
Less: director salaries
(£25,140)
Less: employer NIC payable
(£2,271)
Less: pension contributions
£0
Taxable profit
£522,589
Corporation tax
CT lower limit (£50,000 ÷ (1 + 0 associated))
£50,000
CT upper limit (£250,000 ÷ (1 + 0 associated))
£250,000
Band:Main rate
At main rate (25.0%)
£130,647
Corporation tax payable
£130,647
Dividend pool (taxable profit \u2212 corporation tax)
£391,942
Dividends declared (60% extraction)
£235,165
Dividends per director
£117,583
Retained in company
£156,777
Gross salary
£12,570
Gross dividends
£117,583
Total income
£130,153
Personal allowance
Standard PA
£12,570
Income above £100,000
£30,153
PA reduction (£30,153 ÷ 2)
(£12,570)
Tapered PA
£0
Income tax on salary
Salary covered by PA
£0
Taxable salary
£12,570
Basic rate: £12,570 at 20.0%
£2,514
Income tax on salary
£2,514
Employee NIC
Salary vs primary threshold (£12,570)
£0 above threshold
Employee NIC
£0
Dividend tax
Remaining PA applied to dividends
£0
Taxable dividends
£117,583
Dividend allowance (nil-rate band)
£500 at 0% = £0
Basic rate band
£37,200 at 10.75% = £3,999
Higher rate band
£74,870 at 35.75% = £26,766
Additional rate band
£5,013 at 39.35% = £1,972
Total dividend tax
£32,737
Total personal tax
£35,251
(Income tax £2,514 + Employee NIC £0 + Dividend tax £32,737)
Gross salary
£12,570
Less: income tax on salary
(£2,514)
Less: employee NIC
£0
Net salary
£10,056
Gross dividends
£117,583
Less: dividend tax
(£32,737)
Net dividends
£84,845
Spendable cash (net salary + net dividends)
£94,901
Total value (spendable cash + pension)
£94,901
Total tax & NIC paid
Employer NIC payable
£2,271
Corporation tax
£130,647
Personal tax (× 2 directors)
£70,503
Total
£203,421
Tax leakage (total tax \u00f7 pre-extraction profit)
37.0%
Effective extraction rate
34.5%
(spendable cash × 2 ÷ pre-extraction profit)
Retained in company
£156,777
Disclaimer: This calculator provides illustrative estimates only. It is not personal tax advice. Figures are based on published HMRC rates for 2026/27. Your personal circumstances may differ — consult a qualified accountant before making decisions. Rates last updated: April 2026.