Limited company tax
- What the director keeps
- £58,147.01
- Employer's NI on the salary
- £1,135.50
- Taxable profit after salary and NI
- £64,294.50
Every figure on this page is worked out from the inputs you enter, by the method stated below it, at the rates and thresholds HMRC publishes on gov.uk and cited beside them. Dividvo publishes no advice on what your company should pay you: the defaults are a worked example to replace with your own numbers, and the tax band is always yours to choose.
Limited company tax is three taxes pretending to be one. The company pays corporation tax on its profit, at nineteen percent up to £50,000, twenty-five percent above £250,000 and a marginal rate between. The director pays income tax and National Insurance on their salary, and dividend tax on the dividends the company declares out of what is left after corporation tax. The company also pays employer's National Insurance on the salary above the secondary threshold. Nothing about the total is decided until the salary and dividend split is, which is why the question how much tax does a limited company pay has no single answer and why this page and the free calculator work it from the company's own numbers rather than quoting an average.
Open the Ltd company tax calculator Free to use. No account, no card, no trial clock.
Start with the company's tax, because everything else is paid out of what is left
Profit after the director's salary and the employer's NI on it is what corporation tax is charged on. At £90,000 of turnover, £12,000 of expenses and a £12,570 salary, the worked example on the calculator lands in the marginal band, and the effective rate is neither nineteen nor twenty-five percent but somewhere between, printed as its own line.
Then the director's tax on the salary and the dividend
A salary at the personal allowance carries no income tax and, being above the secondary threshold of £5,000, carries employer's NI at fifteen percent on the excess unless the Employment Allowance applies. The dividend declared out of after-tax profit is taxed above the £500 allowance at 10.75, 35.75 or 39.35 percent depending on the band the dividend lands in once it is added to the salary.
Read the total across company and director, not either alone
The figure that decides whether a split is sensible is the sum of corporation tax, employer's NI, income tax and dividend tax against the profit the company made. The calculator prints that total and what the director keeps beside it, so a change to the salary can be judged on both at once rather than on the company's tax bill alone.
Dividvo Pro
Keeping what you make
The answers are free forever. Pro turns them into the company's own record: your company name and number on the dividend vouchers and the sheets, no watermark, every year's figures, every dividend declared and every loan movement saved against the company, the HMRC and Companies House dates with reminders, and clean exports for the accountant.
- Dividend vouchers emailed to each shareholder
- Connect your own Stripe account
- Connect your QuickBooks Online or Xero
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Limited company tax: common questions
What are the limited company tax rates this year?
Corporation tax is nineteen percent on profits up to £50,000 and twenty-five percent above £250,000, with marginal relief between. Dividends above the £500 allowance are taxed at 10.75 percent for a basic rate taxpayer, 35.75 percent at the higher rate and 39.35 percent at the additional rate, and employer's National Insurance is fifteen percent on salary above £5,000. All from gov.uk, read on the date cited on this page.
Does the director still complete a self assessment?
Usually, yes. A director with dividend income above the allowance and the unused personal allowance has to report it to HMRC, and self assessment is how that is done. The dividend figure on the return should match the vouchers the company issued, which is one reason Pro keeps the vouchers against the year.
Will Dividvo tell us the best salary and dividend split?
No. It works the tax on whatever split you enter and shows the total, and you can compare two splits side by side in Pro. Which split is right depends on things the sheet cannot see, such as other income, pension plans and state pension entitlement, and that is a conversation for an accountant.
Will it do what you need for Limited company tax?
Tell us what your company needs and we will tell you straight whether Dividvo Pro does it today, whether it is coming, or whether you need an accountant rather than software. A person reads these and replies.