Compare the net income you'd take home as a sole trader versus operating through a limited company, including corporation tax, salary, dividend tax and the option to retain profit.
Données vérifiées · July 2026
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As a sole trader, all profit is taxed as your income via income tax and Class 4 NIC. Through a limited company, profit is first taxed at corporation tax rates (19-25%), then you extract a mix of a modest salary (deductible, low NIC at this level) and dividends (taxed separately at lower dividend rates), optionally leaving some profit retained in the company rather than extracted at all. The comparison shows which structure leaves you with more net income for the same underlying profit.
£60,000 annual profit, £12,570 director's salary, no profit retained: compares full sole-trader income tax and Class 4 NIC against corporation tax plus salary and dividend tax under the limited-company route.
Enter your annual profit before any salary or extraction.
Enter the director's salary you'd take in the limited-company scenario.
Enter any profit you'd choose to leave in the company rather than extract as dividends.
Compare the net income and total tax under each structure.
Last data update
July 7, 2026
Sources and references
HMRC — Income Tax rates and Personal Allowances (gov.uk/income-tax-rates); Tax on dividends (gov.uk/tax-on-dividends); Corporation Tax rates, 2025/26.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
No — at lower profit levels the extra administrative burden and dividend tax on full extraction can make sole trader status simpler and just as tax-efficient; the gap generally widens in the company's favour as profit rises.
Yes, within reason — but salary above small amounts attracts employer and employee NIC, so most owner-directors keep salary low and rely on dividends for the bulk of extraction.