UK Limited Company Tax Calculator
🏢 Company & Personal Details
📊 Your Tax Breakdown
Enter your company and personal details above and click "Calculate Limited Company Tax" to see your complete tax breakdown.
We'll show you Corporation Tax, dividend tax, and your net income.
What Is Limited Company Tax?
If you run your business as a limited company, you'll need to understand how your company and you as an individual are taxed. The tax system for limited companies is different from being a sole trader or partnership.
With a limited company, the company itself pays Corporation Tax on its profits. Then, when you take money out of the company (as salary or dividends), you may also pay Income Tax and National Insurance on that income.
This UK Limited Company Tax Calculator helps company directors and shareholders estimate the total tax payable on their company profits, including:
- Corporation Tax — tax on company profits
- Income Tax — tax on salary and dividends
- National Insurance — on salary
- Dividend Tax — tax on dividend income
The calculator shows your net income after all these taxes, helping you plan your tax-efficient remuneration strategy.
How Limited Company Tax Works
Understanding how tax works for a limited company is crucial for effective financial planning. Here's the basic structure:
1. Company Level — Corporation Tax
The company pays Corporation Tax on its taxable profits. Taxable profit is calculated as:
Corporation Tax rates for the 2024-2025 tax year are:
- Small Profits Rate: 19% on profits up to £50,000
- Main Rate: 25% on profits over £250,000
- Marginal Relief: For profits between £50,000 and £250,000
2. Director Level — Salary
Directors are employees of the company. Any salary paid is:
- A deductible expense for the company (reduces Corporation Tax)
- Subject to Income Tax (after Personal Allowance)
- Subject to National Insurance (above thresholds)
Many directors take a salary equal to the National Insurance Secondary Threshold (£12,570 for 2024-2025) to use their Personal Allowance without paying tax.
3. Director Level — Dividends
Dividends are distributions of after-tax profits to shareholders. They are:
- Not deductible for Corporation Tax purposes
- Subject to Dividend Tax (different rates to salary)
- Taxed with a Dividend Allowance (£500 for 2024-2025)
Dividend tax rates (2024-2025):
- Basic rate: 8.75%
- Higher rate: 33.75%
- Additional rate: 39.35%
Corporation Tax Rates for Limited Companies
For the 2025-2026 tax year, the Corporation Tax rates are:
- Small Profits Rate: 19% on profits up to £50,000.00
- Main Rate: 25% on profits over £250,000.00
- Marginal Relief: For profits between £50,000.00 and £250,000.00
If your company has associated companies, the £50,000 and £250,000 thresholds are divided by the number of associated companies. This calculator provides an estimate for standard companies.
For authoritative information, visit GOV.UK Corporation Tax Rates.
Dividend Tax for Limited Company Shareholders
When you take dividends from your limited company, you may have to pay Dividend Tax. The rates are different from Income Tax on salary.
For the 2025-2026 tax year:
- Dividend Allowance: £500.00 (tax-free dividends)
- Basic Rate: 8.75% on dividends above the allowance
- Higher Rate: 33.75%
- Additional Rate: 39.35%
Your tax band is determined by your total income (salary + dividends + other income) after your Personal Allowance.
For more information, see GOV.UK Dividend Tax guidance.
Salary vs Dividends: Tax-Efficient Remuneration
One of the key decisions for limited company directors is how to take money from the company in the most tax-efficient way.
Taking a Salary
Benefits of a salary:
- Is a deductible expense — reduces Corporation Tax
- Builds National Insurance contributions (State Pension entitlement)
- Can be paid tax-free up to the Personal Allowance (£12,570)
Drawbacks of a salary:
- Subject to Income Tax above the Personal Allowance
- Subject to National Insurance (employee and employer)
Taking Dividends
Benefits of dividends:
- No National Insurance payable
- Lower tax rates than salary
- Tax-free allowance (£500 for 2024-2025)
Drawbacks of dividends:
- Not a deductible expense — no Corporation Tax saving
- Only payable from post-tax profits
- No National Insurance contributions toward State Pension
Most directors use a combination of salary (up to the National Insurance threshold) and dividends to minimise their overall tax liability.
Example Limited Company Tax Calculations
Example 1: Small Company with Salary Only
Company Profit: £40,000
Director Salary: £12,570 (Personal Allowance)
Taxable Profit: £40,000 - £12,570 = £27,430
Corporation Tax: £27,430 × 19% = £5,212
Income Tax on Salary: £0 (within Personal Allowance)
National Insurance: £0 (below threshold)
Net Income: £40,000 - £5,212 = £34,788
Example 2: Small Company with Salary and Dividends
Company Profit: £50,000
Director Salary: £12,570
Dividends Taken: £20,000
Taxable Profit: £50,000 - £12,570 = £37,430
Corporation Tax: £37,430 × 19% = £7,112
Income Tax on Salary: £0
Dividend Tax: (£20,000 - £500 allowance) × 8.75% = £1,706
Net Income: £50,000 - £7,112 - £1,706 = £41,182
Example 3: Larger Company with Higher Rate Tax
Company Profit: £100,000
Director Salary: £12,570
Dividends Taken: £50,000
Taxable Profit: £87,430
Corporation Tax: Marginal Relief applies — approximately £21,000
Income Tax on Salary: £0
Dividend Tax: ~£9,700 (basic and higher rates)
Net Income: £100,000 - £21,000 - £9,700 = £69,300
Frequently Asked Questions
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