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What salary should a director take in 2026/27?
Most one-director companies choose between two salaries. Which one is better depends on your company.
The two common choices
- £12,570 a year. Uses your personal allowance, so no income tax and no employee National Insurance. The company pays 15% employer National Insurance on the part above £5,000, but the salary and that National Insurance lower its Corporation Tax.
- £5,000 a year. No National Insurance for anyone. The rest of your allowance is used by dividends instead.
For most companies paying Corporation Tax, £12,570 leaves a little more in total. If the company also pays someone else through payroll, it can usually claim the Employment Allowance, which can make a higher salary worth it.
Thresholds for 2026/27
| Personal allowance | £12,570 |
|---|---|
| Employer National Insurance starts | £5,000 (15%) |
| Employee National Insurance starts | £12,570 (8%) |
| Employment Allowance | £10,500 |
Keep paying the salary through payroll each month, so it counts towards your State Pension.
See your own best split, and the difference from last year.
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