Optimise your salary, dividends, and pension contributions for 2026/27. qualified advice that legally minimises your tax and National Insurance bill.
Director remuneration planning is the process of structuring your salary, dividends, pension contributions, and benefits to minimise your combined income tax, National Insurance, and corporation tax liability. For 2026/27, the right structure can save a typical director thousands of pounds per year.
Most limited company directors take a low salary at the Personal Allowance of £12,570 and draw remaining profits as dividends. But the optimal mix depends on your specific circumstances — company profits, other income, employment status, family involvement, and pension position.
Model your optimal salary & dividends split with our calculator →
Understanding the thresholds is the first step to optimising your remuneration.
| Component | Rate / Threshold | Notes |
|---|---|---|
| Personal Allowance | £12,570 | Tax-free income |
| Basic Rate (Income) | 20% | £12,571 – £50,270 |
| Higher Rate (Income) | 40% | £50,271 – £125,140 |
| Dividend Allowance | £500 | Tax-free dividends |
| Dividend Basic Rate | 10.75% | Increased from 8.75% in 2025/26 |
| Dividend Higher Rate | 35.75% | Increased from 33.75% |
| Employee NI (Class 1) | 8% | Above £12,570 |
| Employer NI | 15% | Above £5,000 (secondary threshold) |
| Employment Allowance | £10,500 | Not available to sole-director companies |
| Corporation Tax (small) | 19% | Profits up to £50,000 |
| Annual Pension Allowance | £60,000 | Or 100% of earnings if lower |
We model the optimal salary-dividend split for your exact circumstances — company profits, other income, and tax band position.
Employer pension contributions are a corporation tax deduction with no NI. We maximise your allowance while keeping your company cash healthy.
If your spouse or family members are shareholders or employees, we structure their involvement to use additional tax-free allowances legitimately.
Company cars, health insurance, and other benefits — we calculate the P11D impact and advise whether they’re worth it after tax.
We don’t wait until year-end. Quarterly reviews ensure your remuneration stays optimised as profits change and thresholds shift.
If you’ve borrowed from the company, we manage your director’s loan account to avoid the S455 tax charge of 33.75%.
Every director’s situation is different. Here are two common profiles we optimise for.
Optimal 2026/27 strategy for a sole director with £80,000 company profits:
When you have employees, the £10,500 Employment Allowance offsets employer NI — changing the optimal salary:
Our free calculator shows you the most tax-efficient split for 2026/27 — including NI, dividend tax, and corporation tax.
Use the Calculator →Get a personalised remuneration plan for 2026/27 — modelled to your exact company and personal circumstances.
Godwin Pinto ACA is a chartered accountant and founder of AccTek with 20+ years of experience accounting and tax for contractors, startup and SME .
Official guidance
For the latest HMRC and Companies House guidance, see Tax on dividends and Income Tax rates and allowances. AccTek Ltd is an independent accountancy firm and is not affiliated with HMRC or GOV.UK.
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
