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  • Writer's pictureJohn Massey

Optimum Directors’ Salary and Dividends for 2023/24 💷

Updated: Mar 20

Optimum Directors Salary

What's the optimum directors’ salary and dividend mix for 2023/24?

Small companies usually pay their directors a mix of salary and dividends; traditionally set to avoid income tax and national insurance. On this basis, the recommended remuneration package for the forthcoming tax year is:

Optimum Directors Salary table

Dividends exceeding the Dividend Allowance of £1,000 will be taxed via the directors’ Self-Assessment Tax Return at 8.75%. If dividends are paid up to the Basic Rate tax threshold of £50,270, there will be a personal tax bill of £3,211.

Companies with more than one director on the payroll may benefit from the Employment Allowance, which reduces the company’s Class 1 National Insurance contributions (Employer’s N.I.) by up to £5,000.

In such cases, a higher than usual directors' salary - up to the Personal Allowance - can produce overall tax savings of £601 (last year £514).

This higher, non-traditional directors' salary is not the best fit for everyone. More than ever, personal circumstances must be carefully considered to give the best results.

Each client of ours will be receiving a personalised recommendation shortly.

Would you like help to pay less tax? Feel free to get in touch or check out our related posts 👇

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