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NetGrow

Dividend vs Salary Calculator

Compare take‑home pay from salary vs dividends by country. Estimate tax, net income, and see take‑home across salary/dividend mixes with a shareable chart.

Compare take-home pay by country

If you run a business, how you extract income can change your net take‑home. Salary is usually taxed as employment income, while dividends may be taxed differently depending on local rules. This calculator helps you compare scenarios using a consistent, transparent model.

Calculator

Choose a country and compare your take‑home pay for different salary/dividend mixes.

Dividend rates increase from April 2026.

This tool estimates personal taxes on what you extract. It doesn’t model corporation tax.

15.7%

Auto-kept in sync so salary + dividends = total.

Results

Estimates only. For some countries this tool uses simplified effective-rate models.

Click Calculate to see your breakdown and chart.

How it works

  1. Choose your country (and tax year / filing status where relevant).
  2. Enter the annual income to take out and adjust the salary/dividend split.
  3. The calculator estimates income tax and (where modeled) employee contributions, then shows take‑home for your mix.
  4. The chart sweeps salary proportion from 0–100% so you can see where take‑home is highest.

Benefits

  • Quickly compare salary-heavy vs dividend-heavy strategies.
  • Visualize take‑home across mixes instead of guessing.
  • Stress-test different income levels before committing to a plan.
  • Understand how allowances and bands affect outcomes (especially UK).

How dividends and salary are taxed

Salary is typically taxed as ordinary income and may include employee contributions (for example, National Insurance in the UK). Dividends can be taxed at separate dividend rates (UK) or preferential capital gains rates when qualified (US), but rules and thresholds apply.

Because taxes are usually banded, the most tax‑efficient mix often depends on how your salary uses up allowances and brackets before dividend rates kick in.

When dividends can be more tax-efficient

  • When dividend rates are lower than your marginal salary rates (common in some bands).
  • When dividends qualify for preferential treatment (e.g., qualified dividends in the US).
  • When keeping salary modest preserves allowances/brackets for dividends (UK).

Also consider your wider plan—cash flow, reinvestment, and ROI. Try the ROI Calculator or the Cash Flow Forecast Calculator.

Common mistakes to avoid

  • Assuming tax rates apply to the whole amount (most systems are banded).
  • Ignoring timing: dividends may be paid at different points in the year than salary.
  • Comparing take-home without considering company tax and allowable deductions.
  • US: forgetting state/local and payroll taxes when planning cash withdrawals.

Dividend vs salary FAQs

Is dividends vs salary always a simple tax win?▾
No. The most efficient mix depends on your country, total income, allowances, and whether dividends receive preferential rates. This tool helps you compare scenarios, but it’s still an estimate.
Does this include company tax?▾
No. This calculator estimates personal taxes on the amounts you extract. Company tax rules vary widely and can materially change the real outcome.
How does the UK dividend allowance work?▾
In the UK, the first £500 of dividend income (above any remaining personal allowance) is taxed at 0% as the dividend allowance. Above that, dividend tax rates apply based on your income band.
Why does salary affect dividend tax in the UK?▾
UK dividends are taxed after non-dividend income. Salary uses up personal allowance and tax bands first, so dividends may fall into higher dividend tax rates as salary increases.
US: does this include state taxes or payroll taxes?▾
No. The US estimate is federal only and excludes state/local tax and payroll taxes (Social Security/Medicare). Use it as a directional comparison.
US: what are qualified dividends?▾
Qualified dividends may be taxed at long‑term capital gains rates instead of ordinary income rates. Eligibility depends on holding periods and other IRS rules.
Australia: how are franking credits handled here?▾
This tool uses a simplified gross‑up and credit-offset approach based on an assumed company tax rate. Real outcomes depend on ATO rules, Medicare levy, and your full income profile.
Canada: why are there “effective rates”?▾
Dividend taxation in Canada involves gross-up and credits and varies by province. For a simple, adjustable estimate, we use effective rates you can tune for your situation.
What should I use as “income to take out”?▾
Use the annual amount you want to extract from your business for personal use. If your business income varies, try a conservative baseline and stress-test higher/lower scenarios.
Should I rely on this for filing or planning a tax strategy?▾
No. Use it for scenario planning and education. For decisions that impact tax liabilities, consult a qualified accountant or tax professional.
NetGrow

Dividend vs Salary Calculator

Compare take‑home pay from salary vs dividends by country. Estimate tax, net income, and see take‑home across salary/dividend mixes with a shareable chart.

Compare take-home pay by country

If you run a business, how you extract income can change your net take‑home. Salary is usually taxed as employment income, while dividends may be taxed differently depending on local rules. This calculator helps you compare scenarios using a consistent, transparent model.

Calculator

Choose a country and compare your take‑home pay for different salary/dividend mixes.

Dividend rates increase from April 2026.

This tool estimates personal taxes on what you extract. It doesn’t model corporation tax.

15.7%

Auto-kept in sync so salary + dividends = total.

Results

Estimates only. For some countries this tool uses simplified effective-rate models.

Click Calculate to see your breakdown and chart.

How it works

  1. Choose your country (and tax year / filing status where relevant).
  2. Enter the annual income to take out and adjust the salary/dividend split.
  3. The calculator estimates income tax and (where modeled) employee contributions, then shows take‑home for your mix.
  4. The chart sweeps salary proportion from 0–100% so you can see where take‑home is highest.

Benefits

  • Quickly compare salary-heavy vs dividend-heavy strategies.
  • Visualize take‑home across mixes instead of guessing.
  • Stress-test different income levels before committing to a plan.
  • Understand how allowances and bands affect outcomes (especially UK).

How dividends and salary are taxed

Salary is typically taxed as ordinary income and may include employee contributions (for example, National Insurance in the UK). Dividends can be taxed at separate dividend rates (UK) or preferential capital gains rates when qualified (US), but rules and thresholds apply.

Because taxes are usually banded, the most tax‑efficient mix often depends on how your salary uses up allowances and brackets before dividend rates kick in.

When dividends can be more tax-efficient

  • When dividend rates are lower than your marginal salary rates (common in some bands).
  • When dividends qualify for preferential treatment (e.g., qualified dividends in the US).
  • When keeping salary modest preserves allowances/brackets for dividends (UK).

Also consider your wider plan—cash flow, reinvestment, and ROI. Try the ROI Calculator or the Cash Flow Forecast Calculator.

Common mistakes to avoid

  • Assuming tax rates apply to the whole amount (most systems are banded).
  • Ignoring timing: dividends may be paid at different points in the year than salary.
  • Comparing take-home without considering company tax and allowable deductions.
  • US: forgetting state/local and payroll taxes when planning cash withdrawals.

Dividend vs salary FAQs

Is dividends vs salary always a simple tax win?▾
No. The most efficient mix depends on your country, total income, allowances, and whether dividends receive preferential rates. This tool helps you compare scenarios, but it’s still an estimate.
Does this include company tax?▾
No. This calculator estimates personal taxes on the amounts you extract. Company tax rules vary widely and can materially change the real outcome.
How does the UK dividend allowance work?▾
In the UK, the first £500 of dividend income (above any remaining personal allowance) is taxed at 0% as the dividend allowance. Above that, dividend tax rates apply based on your income band.
Why does salary affect dividend tax in the UK?▾
UK dividends are taxed after non-dividend income. Salary uses up personal allowance and tax bands first, so dividends may fall into higher dividend tax rates as salary increases.
US: does this include state taxes or payroll taxes?▾
No. The US estimate is federal only and excludes state/local tax and payroll taxes (Social Security/Medicare). Use it as a directional comparison.
US: what are qualified dividends?▾
Qualified dividends may be taxed at long‑term capital gains rates instead of ordinary income rates. Eligibility depends on holding periods and other IRS rules.
Australia: how are franking credits handled here?▾
This tool uses a simplified gross‑up and credit-offset approach based on an assumed company tax rate. Real outcomes depend on ATO rules, Medicare levy, and your full income profile.
Canada: why are there “effective rates”?▾
Dividend taxation in Canada involves gross-up and credits and varies by province. For a simple, adjustable estimate, we use effective rates you can tune for your situation.
What should I use as “income to take out”?▾
Use the annual amount you want to extract from your business for personal use. If your business income varies, try a conservative baseline and stress-test higher/lower scenarios.
Should I rely on this for filing or planning a tax strategy?▾
No. Use it for scenario planning and education. For decisions that impact tax liabilities, consult a qualified accountant or tax professional.