Useful next calculations
Rates and sources, 2026/27
2026/27 illustrative director-extraction model. It uses standard employer and employee National Insurance, Corporation Tax rates and dividend rates, but cannot assess company-law or personal-tax facts.
| Band or figure | Rate |
|---|---|
| Employer NI | 15% above £5,000 |
| Corporation Tax | 19% small profits · 25% main rate |
| Dividend Allowance | £500 |
| Employment Allowance | not modelled |
Source: GOV.UK — Corporation Tax rates and allowances. Source checked for 2026/27.
When to use this calculator
- Before pricing a job, setting margin targets or reviewing hiring costs.
- When you want to test sensitivity around volume, tax, markup or overheads.
- When you need a practical estimate before committing to a budget or proposal.
- When you are modelling break-even volume as costs or prices change.
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.
| Input | Value |
|---|---|
| Profit | £80,000 |
| Less salary (£12,570) | £67,430 |
| Employer NI above £5,000 | £1,136 |
| Taxable company profit | £66,295 |
| Corp Tax (Marginal Relief) | £13,818 |
| Dividend pool | £52,476 |
| Personal tax on salary (covered by PA) | £0 |
| Salary NI (below threshold) | £0 |
| Dividend tax (basic + higher band) | £9,157 |
| Director take-home | £55,890 |
| Total tax (employer NI + CT + dividend) | £24,110 |
This scenario’s combined company and personal tax is about 30.1% of the £80,000 profit before extraction. It is not a recommendation for a salary level or dividend declaration.
How to read your results
Total Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Method & assumptions
This 2026/27 scenario model starts with company profit before the chosen director salary and employer National Insurance. It deducts standard employer Class 1 National Insurance at 15% above the £5,000 annual Secondary Threshold, estimates Corporation Tax using the small-profits, marginal-relief and main-rate framework, then estimates the director’s Income Tax, employee National Insurance and Dividend Tax. It does not run a separate salary-only scenario.
The result assumes one England, Wales or Northern Ireland director-shareholder, no other income and an annual approximation. It excludes the Employment Allowance, associated-company limits, payroll timing and category letters, pension contributions, benefits, expenses, shareholder rights, retained-profit history and Scottish rates. Treat it as an illustrative comparison only; obtain professional company and tax advice before declaring dividends or changing payroll.
Common mistakes
- Using optimistic assumptions without testing a more cautious scenario.
- Using revenue in place of gross profit when calculating margin.
- Treating the result as a final quote instead of a planning estimate.
- Forgetting employer on-costs when modelling the true cost of a hire.
What to do next
- Try at least one more scenario so you can compare a realistic range.
- Use the related calculators below to cross-check the decision from another angle.
- Write down the key outputs from your best scenarios before you decide.
- If the result surprises you, change one input at a time to isolate the driver.