Company Extraction Calculator 2026/27

By Omair SaoLast reviewed 25 September 2026 — rates for the 2026/27 tax year. See how we check our figures.

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.

Company Details

Company profit available to extract (£)

Pre-tax profit available in the company

Other employment income (£)

Salary from another job, if any

Pension allowance already used (£)

Of the £60,000 annual allowance

Scotland

Scottish income tax bands

Employment Allowance

£10,500 offset on employer NI

This calculator provides simplified estimates for illustration purposes. Company tax planning involves many variables — always consult a qualified accountant before making decisions.

Enter your company profit

We'll show you the most tax-efficient way to extract it

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: 10.75% basic, 35.75% higher, 39.35% additional rate (the first two rose by 2 percentage points on 6 April 2026) — 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.

Who this company extraction calculator is for

Directors with more profit in the company than they need to live on, who want to know the order in which to use salary, pension, dividends, ISAs and investment reliefs.
Owners building up retained profit who are unsure whether to leave it in the company, invest it, or pay it out.
Higher earners approaching £100,000 of personal income who want to keep dividends below the point where the Personal Allowance starts to disappear.
Anyone comparing the 22 methods described in our Smart Money guides and wanting to see them ranked for their own numbers.

How the company extraction calculator works

1
Salary first, up to the Personal Allowance
A salary of £12,570 costs the director nothing in income tax or employee NI, is deductible for corporation tax, and secures a State Pension qualifying year. The company pays 15% employer NI on the amount above £5,000 unless the Employment Allowance applies.
2
Employer pension contributions next
Contributions the company makes to the director's pension are deductible for corporation tax, carry no NI, and are not taxed on the director until the money is drawn in retirement, when 25% is usually tax-free. The annual allowance is £60,000, and unused allowance from the previous three tax years can be carried forward.
3
Dividends up to the basic rate limit
After corporation tax, profit can be paid as dividends. The first £500 is tax-free and the rest is taxed at 10.75% until total income reaches £50,270, then 35.75% up to £125,140. The calculator fills the basic rate band before considering anything taxed at the higher rate.
4
Shelter what you take out
Money already extracted can be sheltered from further tax: £20,000 a year into ISAs, £4,000 of that into a Lifetime ISA with a 25% bonus if you are under 40, and £9,000 per child into a Junior ISA.
5
Investment reliefs and loans for the remainder
For directors who still have taxable income, the calculator shows the income tax relief available from VCTs (20% on up to £200,000, cut from 30% for shares issued from April 2026), EIS (30% on up to £1 million) and SEIS (50% on up to £200,000), and a director's loan of up to £10,000 that is interest-free and tax-free if repaid within nine months of the year end. These carry investment risk and are ranked last for that reason.

Worked examples

£60,000 profit taken as salary and dividends only

The baseline: a £12,570 salary, corporation tax on the rest, and everything after that paid out as dividends. Sole director, no Employment Allowance.

Salary	£12,570
Employer National Insurance	£1,136
Corporation tax19% on £46,295	£8,796
Dividend paid	£37,499
Dividend tax	£3,977
Total tax	£13,909
Cash in the director's hands	£46,091

Result: Just under a quarter of the profit is lost to tax.

£60,000 profit with a £20,000 employer pension contribution

The same company, but it pays £20,000 into the director's pension before dividends. The contribution is deductible, so corporation tax and dividend tax both fall.

Salary	£12,570
Employer National Insurance	£1,136
Employer pension contributionNo tax or NI now	£20,000
Corporation tax19% on £26,295	£4,996
Dividend paid	£21,299
Dividend tax	£2,236
Total tax	£8,367
Cash in the director's handsPlus £20,000 in the pension	£31,633

Result: Total tax falls by £5,541. The director gives up £14,458 of cash today to hold £20,000 in a pension, an immediate uplift of 38% on the money diverted, before any investment growth.

Figures use the 2026/27 rates and rules described above, are rounded to the nearest pound, and were last checked against GOV.UK on 25 September 2026.

Assumptions and limitations

The director has no income outside the company and is under 75, so pension contributions attract relief.
Pension contributions are within the £60,000 annual allowance (tapered for adjusted income over £260,000) and the company can justify them as wholly and exclusively for the business, which HMRC normally accepts for a working director.
Corporation tax is calculated at the 19% small profits rate, marginal relief between £50,000 and £250,000, and 25% above; associated companies reduce those limits.
ISA and Lifetime ISA figures assume the allowances have not already been used in the tax year. The Lifetime ISA can only be opened between ages 18 and 39.
VCT, EIS and SEIS reliefs depend on holding qualifying shares for the minimum period (five years for VCTs, three for EIS and SEIS) and on the company or fund keeping its qualifying status. Capital is at risk.
A director's loan above £10,000, or one not repaid within nine months of the year end, triggers a benefit in kind and a Section 455 charge on the company; the calculator only models the tax-free £10,000.
Rates are for 2026/27. The cash ISA limit for under-65s is due to fall to £12,000 from 6 April 2027, which does not affect this tax year.

Official sources

The figures used by this calculator come from the following official pages. Read how we check our figures.

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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: 10.75% for basic rate taxpayers, 35.75% for higher rate, and 39.35% for additional rate. The ordinary and upper rates rose by 2 percentage points on 6 April 2026 following the November 2025 Budget. 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.