20/10/2026
Salary or dividends? It’s not always as simple as it looks.
For company owner/directors, how you take money from your business can make a significant difference to your personal tax bill and your business’s overall financial position.
Salary is subject to income tax and National Insurance, but it’s deductible from company profits, potentially reducing Corporation Tax.
Dividends are paid from profits after Corporation Tax and aren’t subject to National Insurance. However, dividend tax rates have increased and the dividend allowance is now just £500.
For many business owners, a combination of salary and dividends can provide a sensible balance between tax efficiency, pension contributions and access to certain state benefits.
There’s no one-size-fits-all answer. Your business profits, personal circumstances and future plans all matter.
Please get in touch to discuss your choices further and ensure you choose the most tax-efficient, suitable option.