Company Extraction Calculator 2026/27
Last updated: March 2026 — Rates for the 2026/27 tax year
Running a limited company? Enter your available profit to see the most tax-efficient way to extract it — using salary, dividends, pensions, ISAs, and investment schemes. Our Smart Money waterfall shows you exactly what to do first.
Extraction Methods Compared
There is no single “best” way to extract money from a limited company — the optimal approach depends on your income level, personal circumstances, and financial goals. This calculator compares all major methods side by side.
| Method | Corporation Tax Relief | NI Payable | Best For |
|---|---|---|---|
| Salary (£12,570) | Yes — 25% | None | State Pension entitlement |
| Dividends | No | None | Regular income above salary |
| Employer Pension | Yes — 25% | None | Long-term, tax-free growth |
| Director's Loan | No | None | Short-term cash needs |
| EIS / VCT | No | None | Higher-rate taxpayers |
Key Tax Rates for Directors 2026/27
- Corporation tax: 25% on profits above £250,000 (19% for profits under £50,000, marginal relief between).
- Dividend tax: 8.75% basic, 33.75% higher, 39.35% additional rate — with a £500 annual tax-free allowance.
- Employer NI: 15% on salary above £5,000 (£10,500 Employment Allowance may apply).
- Pension annual allowance: £60,000 — employer contributions are tax-free and NI-free.
- Personal allowance taper: income over £100,000 loses £1 of allowance per £2 earned, creating the 60% tax trap.
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Frequently Asked Questions
What is the most tax-efficient way to take money out of a limited company?▾
The most tax-efficient strategy combines a director's salary at the personal allowance (£12,570), employer pension contributions (up to £60,000), and dividends. This minimises income tax, National Insurance, and takes advantage of corporation tax deductions.
How much tax will I pay on dividends in 2026/27?▾
Dividend tax rates for 2026/27 are: 8.75% for basic rate taxpayers, 33.75% for higher rate, and 39.35% for additional rate. The first £500 of dividends is tax-free. No National Insurance is payable on dividends.
What is the optimal director salary for 2026/27?▾
The optimal salary is £12,570 — matching the personal allowance. At this level, you pay zero income tax and zero employee NI. The salary is a deductible expense for the company, saving corporation tax. It also counts as a qualifying year for the State Pension.
Can I pay pension contributions from my company?▾
Yes. Employer pension contributions are one of the most tax-efficient extraction methods. The company gets corporation tax relief (up to 25% saving), no employer NI is payable, and you pay no personal tax on the contribution. The annual allowance is £60,000.
What is salary sacrifice for a company director?▾
While technically directors don't 'sacrifice' salary in the traditional sense, paying a lower salary and taking dividends or making pension contributions instead achieves the same tax-efficient result. The key is to keep salary at the personal allowance threshold.
Is it better to take dividends or salary from my company?▾
Generally, a combination is best. Take a salary of £12,570 (personal allowance) to get the corporation tax deduction and NI qualifying year, then take the rest as dividends to avoid National Insurance. Pension contributions should also be considered before dividends.