The short answer
On £30,000 of company profit before your own pay, a single director in England paying themselves a £12,570 salary and distributing the rest as dividends takes home about £24,403 in 2026-27. Roughly £5,597 goes in employer National Insurance, Corporation Tax and dividend tax. A sole trader on the same profit would keep about £25,468.
Checked 6 November 2026. Rates for 2026/27.On £30,000 of company profit before your own pay, a single director in England paying themselves a £12,570 salary and distributing the rest as dividends takes home about £24,403 in 2026-27. Roughly £5,597 goes in employer National Insurance, Corporation Tax and dividend tax. A sole trader on the same profit would keep about £25,468.
Key takeaways
- A £12,570 salary with the rest paid as dividends gives a take-home of about £24,403 on £30,000 profit.
- Total tax and National Insurance come to about £5,597, or roughly 18.7% of profit.
- Because there is no employee NI or income tax on a salary at the personal allowance, most of the tax is Corporation Tax, employer NI and dividend tax.
- At this profit level a sole trader would keep about £1,065 more if every pound is withdrawn.
- A limited company often makes more sense when you can leave profit in the business, use pensions or need limited liability.
The assumptions behind these numbers
Every take-home calculation depends on assumptions, so here are ours. We have modelled a single director-shareholder in England with no other income, no student loan and no benefits in kind. The company has £30,000 of profit before paying you anything, including the salary, employer National Insurance and Corporation Tax. All profit after tax is paid out as dividends. We use 2026-27 rates: a £12,570 personal allowance, employer National Insurance of 15% above £5,000, Corporation Tax at 19% for profits up to £50,000, and dividend tax of 10.75% in the basic rate band after a £500 dividend allowance.
We have not assumed any Employment Allowance, because a company where the director is the only employee cannot normally claim it. If you want to run your own numbers, our take-home pay calculator does the same job.
The step-by-step calculation
| Step | Amount |
|---|---|
| Company profit before director pay | £30,000.00 |
| Director salary | £12,570.00 |
| Employer NI (15% above £5,000) | £1,135.50 |
| Profit subject to Corporation Tax | £16,294.50 |
| Corporation Tax at 19% | £3,095.95 |
| Available for dividends | £13,198.55 |
| Dividend tax (after £500 allowance, at 10.75%) | £1,365.09 |
| Income Tax and employee NI on salary | £0.00 |
| Total take-home | £24,403.46 |
In other words, of the £30,000 profit you start with, £24,403 reaches your personal bank account and £5,597 goes in tax. That is about 81% kept.
Why a £12,570 salary works well here
A salary equal to the personal allowance is deductible for Corporation Tax, uses up your tax-free allowance and attracts no Income Tax or employee National Insurance. It does trigger employer NI at 15% on the part above £5,000, but the Corporation Tax saving on the salary and the NI more than offsets that for a profit at this level. It also builds a qualifying year for your State Pension because the salary is above the lower earnings limit of £6,708.
We tested lower salaries on the same profit. A £6,708 salary left about £24,045 and a £5,000 salary left about £23,941, so the full personal allowance was better on these figures. Our guide to the best director salary for 2026-27 goes through the trade-offs in more depth.
How this compares with a sole trader
A sole trader with £30,000 of profit pays Income Tax of £3,486 and Class 4 National Insurance of about £1,046, leaving roughly £25,468. That is about £1,065 more than the limited company route when every pound is taken out.
This surprises many people because limited companies used to have a clear tax edge. Higher dividend rates and the structure of employer NI have narrowed that gap, particularly at lower profit levels. It does not mean a sole trader is always better. Our post on limited company vs sole trader covers the non-tax factors, such as limited liability, credibility with clients and the ability to retain profit.
What changes the picture
The figures above assume a simple case. Several real-life factors can change the result materially.
- Leaving profit in the company: profit that is not paid out as dividends is only taxed at Corporation Tax, which defers the personal tax bill.
- Employer pension contributions: these are deductible for Corporation Tax and avoid National Insurance. See our guide to employer pension contributions.
- Other income: a second job, rental income or savings interest can push dividends into a higher tax band.
- Student loan repayments: these reduce take-home further, and dividends can count towards the repayment threshold for Self Assessment-based plans.
- Scotland: Scottish Income Tax bands apply to salary, though dividends use UK rates.
Cash flow, not just the annual figure
A take-home number of £24,403 is not available the day your invoices are paid. Corporation Tax is normally due nine months and one day after the end of the accounting period, while dividend tax is settled through Self Assessment later. That timing difference means some of the money in the company account at year end belongs to HMRC.
Set aside a consistent percentage of every receipt for tax so you are never short. A practical approach is to move roughly a fifth of your turnover into a tax savings account until you know exactly how your numbers work. If you are VAT registered, remember the VAT you collect is also not yours to spend. See our guide to VAT registration for the thresholds.
When a limited company is still worth it at £30,000
There are good reasons to run a limited company even where the tax maths is similar. Limited liability keeps business debts separate from your personal assets. Some clients prefer to contract with a company. You can leave profits in the business to fund growth, spread dividends with a spouse who owns shares, or contribute to pensions through the company. And if your profit is likely to rise, setting up early can avoid a messy transition later.
On the other hand, if you only need to take every pound home and you have no need for liability protection, staying as a sole trader can be simpler and sometimes cheaper. Compare the running costs in our guide to how much it costs to run a limited company.
Next steps
Use your own profit figure in the calculator, check the effect of different salaries and pension contributions, and speak to an accountant before choosing your pay mix. A good adviser will tailor the numbers to your situation, including any other income and your plans for the business.
The bottom line
On £30,000 of profit, a £12,570 salary plus dividends leaves a director about £24,403 in 2026-27, with the sole trader route about £1,065 higher if everything is withdrawn. The decision should rest on your wider goals, not only the headline tax comparison.
Frequently asked questions
How much will I take home from a £30,000 limited company profit?
About £24,403 in 2026-27 for a single director in England paying a £12,570 salary and distributing the remaining profit as dividends, before any other income or student loan.
What salary should I pay myself on £30,000 profit?
On these figures a £12,570 salary gave the highest take-home, ahead of £6,708 and £5,000, though your own circumstances may differ.
Is a limited company better than being a sole trader at £30,000?
Not necessarily on tax alone. A sole trader keeps about £1,065 more if all profit is withdrawn, but a company offers liability protection and the option to retain profit.
Do I pay Corporation Tax on director salary?
No. Salary and employer NI are deductible expenses, so Corporation Tax is charged on the profit after those costs.
Can I use the Employment Allowance as a sole director?
Generally no. A company whose only employee is a director paid above the secondary threshold cannot claim it.
This article is general information, not personal tax or financial advice. Rules and rates change, so check GOV.UK or speak to an accountant about your circumstances. Rates shown are for 2026/27, last checked November 2026.