Guide
Paying yourself from a limited company
Directors often take a salary through PAYE and dividends from profit after Corporation Tax. Salary is a company expense. Dividends are not. The mix changes your Income Tax, National Insurance and the company's tax.
Step by step
- 1Run salary through PAYE
- 2Work out profit after salary and employer National Insurance
- 3Pay Corporation Tax on that profit
- 4Take dividends only from profit available to distribute
- 5Report salary and dividends on your Self Assessment return
Common mistakes
- Taking dividends when the company has no profit
- Forgetting employer National Insurance on salary
- Claiming employment allowance when the director is the only employee
Related guides
Last checked against GOV.UK: 28 October 2026. Tax year 2026/27.
Not affiliated with HMRC. General information, not professional tax advice. Check GOV.UK or speak to a qualified adviser for your situation.