Caveats

• This calculator is only intended as an indicative tool to show the tax and national insurance liabilities of common remuneration strategies, based on 2024/25 rates.
• With regard to the results for director/shareholders, the calculator assumes that:
  • all profits are withdrawn from the company
  • under the ‘low salary, high dividend’ option, it is assumed that the first £9,100 of profits are taken by way of salary, with the balance of profits paid by way of dividend
  • the company does not have associated companies, which may impact the applicable rate of Corporation Tax
  • the company is not a ‘closely held investment company’ and can therefore benefit from the small profits rate (i.e. first £50,000 of profits subject to 19% Corporation Tax where appropriate).
• Sole traders and partnerships with a non-31 March accounting year end may be impacted by Basis Period Reform rules being introduced by HMRC in 2023/24. These rules have not been considered for the purposes of this calculator.
• A company owner can charge interest on loans to the business, which can be an effective remuneration strategy. This has not be considered for the purposes of this calculator.
• There are annual limits to how much an individual can contribute to their pension, whilst achieving tax relief. The excess annual allowance charge is not considered for the purpose of this calculator.