Rates & sources
UK company rates (Corporation Tax, VAT, payroll NI) as published by HMRC and Companies House.
Source: HMRC — Running a business — figures refreshed at the start of each tax year.
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When to use this calculator
- Before pricing a job, setting margin targets, or reviewing hiring costs.
- When you want to test sensitivity around volume, VAT, markup, or overhead changes.
- When you need a practical estimate before committing to a budget or proposal.
Worked example: £80k profit, £12,570 salary, dividends from rest
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Profit
£80,000
Less salary (£12,570)
£67,430
Corp Tax (Marginal Relief)
£14,119
Dividend pool
£53,312
Personal tax on salary (covered by PA)
£0
Salary NI (below threshold)
£0
Dividend tax (basic + higher band)
£3,981
Director take-home
£61,901
Total tax (CT + dividend)
£18,100
Effective combined tax rate ~22.6% — significantly less than full PAYE on the same gross. Higher salaries trigger NI which is the main reason the structure works.
How to read your results
Dividend Pool
Use this metric to compare scenarios side by side and understand how the key drivers affect the final outcome.
Take-Home
Use this metric to compare scenarios side by side and understand how the key drivers affect the final outcome.
Total Tax
Review this figure alongside your gross income so you can understand the true cost of deductions.
Method & assumptionsAuthoritative sources
Common mistakes
- !Using optimistic assumptions without testing a more cautious scenario as well.
- !Comparing outputs from different tools without checking that the inputs match.
- !Treating the result as a final quote instead of a planning estimate.
What to do next
- Try at least one more scenario so you can compare a realistic range instead of a single estimate.
- Use the related calculators below to cross-check the decision from another angle.
- Open one of the linked guides if you need more context before you act on the result.
Frequently asked
Use arrow keys to navigate items, Enter or Space to expand/collapse.
End-of-article next steps
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