Limited company

Limited company tax calculator: from profit to take-home

Four taxes stand between a company’s profit and the director’s bank account; this calculator takes them in the order they apply.

A one-director company with £70,000 of profit before the director’s pay, paying a salary of £12,570 and the rest as dividends in 2026/27, leaves the director £51,042 after every tax. The taxes come in a fixed order. The salary and the employer National Insurance on it (£1,136, at 15 % above £5,000) are business costs. Corporation Tax of £11,168 is then charged on the £56,295 that remains, with marginal relief because that profit sits between £50,000 and £250,000. The £45,126 left can be paid out as dividends, which cost the director £6,654 of Income Tax here. In all, £18,958 goes to HMRC, 27.1 % of the profit. Change the share you draw and the money you leave in the company escapes dividend tax for now.

Take-home from your limited company

Cash to you

£51,042

Corporation Tax£11,168
Employer NI£1,136
Your Income Tax and NI£6,654
Left in the company£0
Set it against a sole trader

Figures checked by Radif Partners · Editorial policy · How we calculate

The cascade, line by line

The table follows £70,000 of profit through a company owned and run by one person, at three levels of payout. The salary is the Personal Allowance, £12,570, which is also the point where employee National Insurance starts, so the director pays none on it.

2026/27, England, Wales or Northern Ireland, one director, no other income.
StepAll drawnHalf drawnNothing drawn
Profit before your pay£70,000£70,000£70,000
Your salary£12,570£12,570£12,570
Employer National Insurance£1,136£1,136£1,136
Corporation Tax£11,168£11,168£11,168
Dividends paid£45,126£22,563£0
Your Income Tax£6,654£2,372£0
Cash to you£51,042£32,761£12,570
Left in the company£0£22,563£45,126

The first three lines never move: Corporation Tax is fixed by the profit, not by what you take. What changes is the dividend tax, which only exists when money leaves the company. With nothing drawn, the director lives on the salary alone and pays no personal tax at all.

Where each figure comes from

Employer National Insurance is 15 % of salary above the secondary threshold of £5,000 (HMRC rates for employers). A company whose director is its only paid employee cannot use the Employment Allowance to cancel it. Corporation Tax for the financial year from 1 April 2026 is 19 % on profits up to £50,000 and 25 % from £250,000, with marginal relief between; the Corporation Tax calculator handles short periods and associated companies. Dividends are taxed on top of the salary, after a £500 allowance, at 10.75 %, 35.75 % or 39.35 %.

Scotland and bigger profits

A Scottish director gets almost the same answer, £51,042 on the same £70,000, because dividends are taxed at UK rates wherever you live in the UK and the salary sits inside the Personal Allowance. Where Scotland does matter is in the comparison with self-employment: a Scottish sole trader pays Scottish rates on the whole profit, which the sole trader comparison sets side by side.

At £120,000 of profit the picture shifts. Corporation Tax rises to £24,418, an effective 23 % of the company’s taxable profit, and drawing everything pushes £81,876 of dividends through the higher dividend rate. The director keeps £74,654. Drawing only half instead would cut the personal tax from £19,792 to £5,157 this year, with £40,938 staying in the company until a later, possibly lower-income, year.

Using the calculator

Type the profit before your own pay, meaning sales less every business cost except your salary. Leave the salary at £12,570 to see the usual set-up, or try £5,000 to see what changes when no employer National Insurance is due. The share paid out runs from 0 to 100 %: a plumber who wants to build a cash reserve for a new van might draw 60 %, while a consultant who needs every pound draws it all.

What the calculator does not include

Accountancy and other running costs, pension contributions made by the company, benefits in kind, directors’ loans and student loan repayments. Enter costs as a lower profit to approximate them.

Questions sole traders ask

How much tax does a limited company pay on £50,000 profit?

With a £12,570 director’s salary taken out first, the company pays £1,136 of employer National Insurance and £6,896 of Corporation Tax at 19 %, because its remaining profit is under £50,000. If the £29,399 left is all paid out, the director adds £3,107 of dividend tax, for a total of £11,138.

Does leaving money in my limited company reduce the tax I pay?

It delays part of it. On £100,000 of profit, drawing everything costs £14,537 of personal tax; drawing half costs £3,557 and leaves £33,588 in the company. That money has paid Corporation Tax but will meet dividend tax whenever it is paid out later, at the rate of that year.

Is a director’s salary deducted before Corporation Tax?

Yes. Salary and the employer National Insurance on it are costs of the company, so they reduce the profit charged to Corporation Tax. Dividends are not: they are paid out of profit that has already been taxed. That is why a salary up to £12,570, free of employee National Insurance, still pays its way despite employer National Insurance above £5,000.

How much can I take out of my limited company as dividends?

No more than the company’s available profits from the current and earlier years, after Corporation Tax. On £70,000 of profit with a £12,570 salary, that ceiling for the year is about £45,126. Each dividend is declared at a directors’ meeting, minuted, and recorded on a voucher, even in a one-person company.

Work out the next thing

Sole trader or limited company

Same profit, two structures: what each leaves you in 2026/27, and why retained profit decides.

Corporation Tax

Small profits rate, main rate and marginal relief, with associated companies and short periods.

Dividend tax

The 2026/27 dividend rates, how the £500 allowance really works, and when to tell HMRC.

Director’s salary

£5,000, £6,708 or £12,570? The director’s salary that leaves the most in 2026/27, and why.

Official sources behind this page

Worked out by

Independent publisher of UK self-employed tax calculators for 2026/27

Rates checked on · Editorial policy · Contact

Tax year 2026/27 (6 April 2026 to 5 April 2027), HMRC and GOV.UK pages last read on . Estimates only, from published 2026/27 rates; not tax advice. HMRC’s calculation of your return is the one that counts.