How to Pay Yourself From a Limited Company

Directors of UK limited companies typically extract income using a combination of salary and dividends.

A common approach involves:

• Paying a small salary (often near the National Insurance threshold)

• Extracting additional income through dividends

This strategy can reduce National Insurance liabilities while remaining tax efficient.

Key considerations include:

• Corporation Tax on company profits

• Dividend tax rates

• Personal allowance utilisation

Professional advice can help ensure the correct balance between salary and dividends. If you would like advice on the most tax-efficient structure for your business, contact Cleartech Accounting for a consultation.