27/07/2026
A question most our clients are asking. How should I pay myself as a Ltd company director? 💰
The most common approach is a combination between salary and dividends 💷
✅ Salary: £12,570
✅ Dividends: £37,700
This keeps it within the basic rate tax band for many directors 😮💨
Dividend Tax Rates (2026/27)
• Basic Rate - 10.75%
• Higher Rate - 33.75%
• Additional Rate - 39.35%
Tax on the the combined salary:
• £12,570 Personal Tax at 0% = £0
• £500 Dividend Allowance at 0% = £0
• £37,200 taxed at 10.75% = £3,999
BUT remember, your actual tax bill depends on your total income, any other earnings, and personal circumstances. What works for one director may not be the best option for another. This calculation is assuming no other source of income and no other payments received.
📩 Need help deciding the most tax-efficient way to pay yourself? Get in touch BEFORE making any withdrawals so we can do the math for you!
