Quest Business Guide: Salary or Dividends? (2026/27)
Salary or Dividends? Keep More of What You Earn.
Running your own limited company is hard enough without paying more tax than you need to. But should you take a salary, dividends, or a mixture of both?
This practical guide explains the differences, compares the options using a £50,000 company profit example, and highlights four common mistakes directors make when paying themselves.
There’s also a simple work page to help you plan how to pay yourself properly.
This Guide is for you if ....
- You run a limited company and aren't sure whether to take a salary, dividends or both.
- You want to understand how your choices affect your tax bill and the money you take home.
- You want to avoid common mistakes with payroll, dividends and taking money out of your company.
It’s probably not for you if...
- You're a sole trader rather than operating through a limited company.
- You're looking for a single salary figure that works for every company director.
- You want to withdraw money from your company without worrying about payroll, profits or tax.