Salary or dividend? March 2016

Owner-managers and contractors often pay themselves in a combination of salaries, bonuses and dividends.

A common strategy is to draw a salary of around £8,000 while also extracting proits from the business as a dividend. A salary of £8,060 (for the 2015/16 tax year) preserves entitlement to the state pension and some beneits. It is also within the personal allowance and below the threshold for employer and employee national insurance contributions (NICs).

crozierjonespwp_apu_mar16_dividends.pdf301.58 KB