26/08/2026
Most directors set their salary and dividend split once and then never look at it again.
That was survivable a few years ago. It costs real money now.
Two things changed. Dividend tax rates rose on 6 April 2026, taking the basic rate to 10.75% and the higher rate to 35.75%. And employer National Insurance has been 15% on salary above £5,000 since April 2025, which a company can't offset with the Employment Allowance if its only employee is its sole director.
Both sides of the equation got more expensive at the same time, and most splits haven't been reviewed since.
There's no single correct answer here. The right split depends on your profit level, whether you have other people on the payroll, what other income you already have, whether pension contributions are part of the plan, and whether you actually need all the cash out personally this year.
Swipe through for what changed and what decides it.
If you'd like us to look at where your split should sit this year, send us a message. No obligation, we're happy to talk it through.
This is general guidance, not personal advice, and every situation is different. Figures are correct at the time of writing, but rules change.
