Director salary and dividends for 2026/27

01

Personal tax reference points

• The standard Personal Allowance remains £12,570 and begins tapering above £100,000 of adjusted net income.
• The dividend allowance is £500 for 2026/27.
• Dividend tax rates are 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate for 2026/27.
• A director's salary must run through PAYE; the appropriate amount depends on other income, National Insurance, Employment Allowance and company circumstances.

02

Declare a dividend in AIS

• Open Pay Yourself > Dividends and check distributable retained profits on the declaration date.
• Enter the total dividend and apply the legal shareholding split.
• Approve the board record and create dividend vouchers.
• Record the payment separately, or leave it credited to the director's loan account until withdrawn.
• Keep the voucher and meeting record with the company's statutory records.

03

Keep withdrawals explainable

A bank withdrawal is not automatically salary or a dividend. Match each payment to payroll, an approved dividend, an expense reimbursement or the director's loan account so the company balance and personal return remain consistent.