£20,000 salary
£594.40Employee NI is 8% of the £7,430 between the £12,570 Primary Threshold and this salary.
2026/27 tax rates
Income Tax on salary follows your selected region. Dividend Tax, Personal Allowance, National Insurance and Corporation Tax use UK-wide rules in this model.
Updated for 2026/27Both Income Tax regions are shown below
For practical comparisons, see £5,000 versus £12,570 director salaries and why Scottish salary bands do not change dividend rates.
Income Tax region
England, Wales or Northern Ireland
These bands apply to non-savings, non-dividend income. Scottish taxpayer status depends on the taxpayer—not the company's registered office.
| Income Tax band | 2023/24 | 2024/25 | 2025/26 | 2026/27 |
|---|---|---|---|---|
| Basic | 20% to £37,700 taxable income | 20% to £37,700 taxable income | 20% to £37,700 taxable income | 20% to £37,700 taxable income |
| Higher | 40% to £125,140 taxable income | 40% to £125,140 taxable income | 40% to £125,140 taxable income | 40% to £125,140 taxable income |
| Additional | 45% above prior bands | 45% above prior bands | 45% above prior bands | 45% above prior bands |
Band limits shown are cumulative taxable-income limits after Personal Allowance. The allowance itself tapers away above £100,000: what the next pound costs there.
Income Tax region
Scotland
These bands apply to non-savings, non-dividend income. Scottish taxpayer status depends on the taxpayer—not the company's registered office.
| Income Tax band | 2023/24 | 2024/25 | 2025/26 | 2026/27 |
|---|---|---|---|---|
| Starter | 19% to £2,162 taxable income | 19% to £2,306 taxable income | 19% to £2,827 taxable income | 19% to £3,967 taxable income |
| Basic | 20% to £13,118 taxable income | 20% to £13,991 taxable income | 20% to £14,921 taxable income | 20% to £16,956 taxable income |
| Intermediate | 21% to £31,092 taxable income | 21% to £31,092 taxable income | 21% to £31,092 taxable income | 21% to £31,092 taxable income |
| Higher | 42% to £125,140 taxable income | 42% to £62,430 taxable income | 42% to £62,430 taxable income | 42% to £62,430 taxable income |
| Top | 47% above prior bands | 48% above prior bands | 48% above prior bands | 48% above prior bands |
| Advanced | — | 45% to £125,140 taxable income | 45% to £125,140 taxable income | 45% to £125,140 taxable income |
Band limits shown are cumulative taxable-income limits after Personal Allowance. The allowance itself tapers away above £100,000: what the next pound costs there.
UK-wide rules
Shared allowances and rates
| Tax rule | 2023/24 | 2024/25 | 2025/26 | 2026/27 |
|---|---|---|---|---|
| Personal Allowance | £12,570 | £12,570 | £12,570 | £12,570 |
| Dividend Allowance | £1,000 | £500 | £500 | £500 |
| Dividend Tax — Basic | 8.75% | 8.75% | 8.75% | 10.75% |
| Dividend Tax — Higher | 33.75% | 33.75% | 33.75% | 35.75% |
| Dividend Tax — Additional | 39.35% | 39.35% | 39.35% | 39.35% |
| Lower Earnings Limit (qualifying year for State Pension) | £6,396 | £6,396 | £6,500 | £6,708 |
| Primary Threshold (employee NI starts) | £12,570 | £12,570 | £12,570 | £12,570 |
| Secondary Threshold (employer NI starts) | £9,100 | £9,100 | £5,000 | £5,000 |
| Upper Earnings Limit | £50,270 | £50,270 | £50,270 | £50,270 |
| Employee NI main rate | 11.50% | 8% | 8% | 8% |
| Employee NI above Upper Earnings Limit | 2% | 2% | 2% | 2% |
| Employer NI rate | 13.80% | 13.80% | 15% | 15% |
| Employment Allowance | £5,000 | £5,000 | £10,500 | £10,500 |
| Corporation Tax small profits rate | 19% | 19% | 19% | 19% |
| Corporation Tax main rate | 25% | 25% | 25% | 25% |
| Marginal relief between | £50,000–£250,000 | £50,000–£250,000 | £50,000–£250,000 | £50,000–£250,000 |
Thresholds are annual amounts for a director's annual earnings period. Corporation Tax limits assume a 12-month period and no associated companies. 2023/24: Employee rate changed from 12% to 10% in January 2024; the model retains its existing blended 11.5% annual approximation.
2026/27 in practice
Four worked tax examples
These annual examples isolate one rule at a time. They are reference calculations, not a salary recommendation or a complete company forecast.
£12,570 salary
£1,135.50The company pays 15% on salary above the £5,000 Secondary Threshold. This example assumes no Employment Allowance; enter any your company can still claim in the calculator.
£12,570 salary + £40,000 dividend
£4,821.25The first £500 of dividend uses the dividend allowance but still occupies the basic-rate band. The balance crosses into the higher-rate band.
£100,000 taxable profit
£22,750.00The 25% main-rate calculation is reduced by £2,250.00 of marginal relief. This assumes a 12-month period and no associated companies. Why this band costs 26.5%.
The worked examples use England, Wales or Northern Ireland where Income Tax affects the result. The Personal Allowance, National Insurance and Corporation Tax rules shown are UK-wide. Scottish rates can change the Income Tax due on salary, while dividends continue to use UK-wide rates.
Self-employed National Insurance
In 2026/27, Class 4 is 6% on annual trading profit above £12,570 up to £50,270, then 2% above that. It is separate from Income Tax and the employment National Insurance rules above.
From 2024/25, Class 2 has no compulsory cash payment. Profits at or above the small-profits threshold (£7,105 in 2026/27) are treated as having paid contributions. Below it, voluntary contributions are outside our estimate. The 2023/24 comparison includes £179.40 compulsory Class 2 when full-year profit exceeds £12,570.
Compare sole-trader and company take-home, or check HMRC's rates for all four years.