Salary vs Dividends — Director Pay
Salary vs dividends: how to pay yourself from your Ltd in 2026/27
Pillar guide to director pay after the April 2026 dividend rate rise.
Most UK limited-company directors pay themselves with a mix of a small salary plus dividends. For 2026/27, the typical approach is a salary at either £5,000 (employer NI secondary threshold) or £12,570 (personal allowance), with the rest drawn as dividends. Dividends are taxed at lower personal rates than salary and carry no National Insurance — **10.75%** (basic), **35.75%** (higher), **39.35%** (additional) above the **£500** dividend allowance. But dividend tax rates rose by 2 points from 6 April 2026, so the optimal split has shifted, and the right answer now depends on your profit level, Employment Allowance status, and wider income. **Read the full pillar guide at [rraccountants.uk/salary-vs-dividend](https://rraccountants.uk/salary-vs-dividend).**
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