Tax Calculator.

One of the most common questions we get asked is how should I pay myself efficiently? The answer is quite straightforward but we have created a Tax Calculator you can use to see the numbers behind the answer.

Tax calculator. This downloadable Excel document can be used to understand the taxes that will apply depending on how you pay yourself, as well as a handy comparison between Limited Companies and Sole Traders.

Tax Calculator and Optimiser

Based on your profit and other income, this calculator provides a breakdown of all of the taxes you can expect to pay as well as a final take-home figure. The taxes illustrated are:

  • Income tax
  • Dividend tax
  • Employers National Insurance contributions
  • Employee National Insurance contributions
  • Corporation tax

It illustrates your optimal salary dividend mix for minimising your overall tax liability and also provides a comparison between Sole Trader and Limited Companies in terms of tax-efficiency at various revenue levels.

Note, some employers, typically those with two or more employees can claim the Employers Allowance, which increases the efficient salary paid level slightly. If this applies to you, refine these numbers with your accountant.

Download TAX Calculator 2022/23
Download TAX Calculator 2021/22
Download TAX Calculator 2020/21

How much should I pay in dividends and salary? Answers below or in the calculator

I am the sole director employee of my limited company

For 2022/23, most will pay a basic salary of £758.33 per month which is the Secondary Threshold, below which you would not normally need to pay National Insurance. The remainder would be paid in dividends as the tax rate on dividends will typically be lower at any remuneration level above this Secondary Threshold.

I am a director of a company with > 1 employees

For 2022/23, for the first time we have a change in rates coming in part-way through the year, meaning you will change the salary after the 6th of July once the new rates come in. For most it will be £823.33 per month and then £1,047.50 from July 2022. For a full description of how to navigate these changes, read our blog post on Tax Efficient Directors Salary 2022/2023.

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