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Salary vs Dividends 2025/26: The Most Tax-Efficient Way to Pay Yourself

29 Aug 2026 · 6 min read

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Why this matters for your business

Kingswood Pakistan help UK business owners keep more of what they earn through proactive, plain-English tax advice. The points below summarise what you need to know about "Salary vs Dividends 2025/26: The Most Tax-Efficient Way to Pay Yourself".

  • Understand the rules that apply to your situation
  • Plan ahead rather than react at year-end
  • Use the right cloud software to stay compliant

How Kingswood can help

Book a free consultation and we will review your position, answer your questions and show you exactly where you could save.

Trusted Advice. Stronger Business. Better Future.

Frequently asked questions

Most single-director companies take a salary around the National Insurance secondary threshold and top up with dividends, but the optimal figure depends on your circumstances and whether you can claim the Employment Allowance.
The dividend allowance for 2025/26 is £500. Dividends above that are taxed at 8.75%, 33.75% or 39.35% depending on your income tax band.