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Tax Tools · Track 3
T1 of 7 — Input & output guides

Owner-Director Optimiser

The Optimiser finds the salary, dividend and pension combination that maximises your combined net wealth — the sum of personal take-home, company retained profit, and pension value — for a given tax year and target income.

Inputs
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Core inputs: profit, take-home, tax year

Tax Year determines which rate table is used — rates for 2021/22 through 2025/26 are all supported. Company profit before salary & dividends is your pre-tax company profit before any director pay — use the Day-Rate Simulator to calculate this if you work on a day-rate basis. Desired personal income after tax is your target net take-home. The Optimiser finds the minimum dividend needed to hit this target at each salary level, then selects the combination that leaves the most combined net wealth.

Optimiser inputs showing tax year 2025/26, desired take-home £60,000, company profit £133,300, salary search bounds, pension settings with employer 8% and employee 12%, single-employee checkbox ticked, and manual scenario £50,000/£12,500
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Salary search bounds

The Salary lower bound and Salary upper bound define the range of salaries the Optimiser evaluates. Defaults are £0 to £200,000. In most cases the optimal salary falls near the NI Primary Threshold (£12,570) or at the point where Employment Allowance fully offsets Employer NI. Narrow the bounds only if you have a specific constraint — for example, a minimum salary requirement for mortgage purposes.

The algorithm runs a coarse grid search every £250, then golden-section refinement over 60 iterations, converging to within 50p. For each salary level, bisection finds the minimum dividend that hits the take-home target.
3
Pensions

Employer contribution can be set as a % of gross salary or a fixed £/year. Employee contribution is entered net (the relief-at-source amount you actually pay); the tool grosses it up by dividing by 0.8 for the pension wealth calculation. Combined gross contributions are capped at the Annual Allowance (£60,000 in 2025/26) — any excess is not tax-relievable and is excluded from the wealth impact calculation. Tick Optimise pension mix automatically to let the tool sweep pension levels and find the best combination.

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Options and manual scenario

Tick Single-employee company if you are the only paid person — this disables Employment Allowance, which single-director companies cannot claim. The Manual scenario fields let you enter a specific salary and dividend to compare against the optimal result — useful for testing your accountant’s recommendation or a prior year’s approach.

Single-employee companies cannot claim Employment Allowance. Leaving it enabled overstates the Employer NI saving and will produce an incorrect optimal salary recommendation.
Reading the results
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Optimal Mix, Taxes and Pensions panels

The Optimal Mix panel confirms the recommended salary and dividend, your take-home, company retained profit, and combined net wealth. The Taxes panel shows the full tax breakdown: Employee NI, Employer NI, PAYE (salary tax), dividend tax, and corporation tax. The Pensions (Optimal) panel shows employer contribution allowed after the Annual Allowance cap, employee net/gross contribution, AA used vs the £60,000 limit, tax saved (personal income tax relief + corporation tax saving), and the net wealth impact of pension contributions.

Results showing Optimal Mix panel with salary £12,750, dividend £56,983, take-home £60,000, retained £5,117, combined £115,716; Taxes panel with Employee NI £14, Employer NI £1,163, PAYE £36, dividend tax £9,683, corporation tax £17,288; Pensions panel showing £40,000 employer contribution, net wealth impact £50,600
Net pension wealth impact = (employer gross allowed + employee gross allowed) + (personal tax saved + CT saved) − employee net cost. In this example: £40,000 employer contribution + £0 employee + £0 personal tax + £10,600 CT saving = £50,600.
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Comparison Report — Personal statement

The report compares up to four scenarios: Left outlier (lowest feasible salary — tests maximum dividend strategy), Right outlier (highest feasible salary — tests salary-only strategy), Manual (your entered comparison), and Optimal (the recommended mix). The Personal statement is structured in three sections. Income Sources shows gross salary and dividends paid for each column. Tax Calculation – Salary shows personal allowance used, income falling into basic/higher/additional bands with tax per band, and Employee NI. Tax Calculation – Dividends shows the £500 dividend allowance, then dividend income stacked into bands above the salary (basic 8.75%, higher 33.75%, additional 39.35%). The Pensions section shows employer and employee contributions, Annual Allowance used, tax saved, and net pension wealth impact. The Simulated Payslip at the bottom summarises gross salary, dividends, all deductions, and net benefit to the individual.

Personal statement showing four columns: Left outlier salary £5,000/dividend £68,537, Right outlier salary £200,000, Manual salary £50,000/dividend £12,500, Optimal salary £12,750/dividend £56,983, with full tax band breakdown for salary and dividends, pensions section, and simulated payslip showing net benefit
The right outlier (salary-only, £200,000) shows why paying everything as salary is tax-inefficient: PAYE reaches £76,203 and Employee NI £6,011 — versus £36 PAYE and £14 NI on the optimal mix.
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Comparison Report — Company statement

The Company statement shows the full company P&L and CT position. Company P&L (IFRS-style) starts with user-entered profit, deducts director salary, Employer NI, and employer pension contribution, arriving at Profit before corporation tax. It then shows the CT expense, profit after tax, dividends paid to the director, and Retained profit — what stays inside the company. The Corporation tax calculation section shows profit before CT, gross CT before pension relief, CT saved due to pensions (pension contributions are a deductible business expense), and net CT payable. The Pensions (company view) section mirrors the personal view but from the company’s perspective: employer contribution, Annual Allowance used, and CT saved. The Company contribution to director’s net worth section totals all company-driven wealth flows: dividends paid, employer pension, retained profit, and CT saving from pension optimisation.

Company statement showing profit before salary £133,300, director salary deducted, Employer NI, employer pension, arriving at profit before CT; CT calculation section; pensions company view; and company contribution to net worth totalling £112,700 for optimal column
The right outlier column shows a negative profit before CT (−£95,950) because a £200,000 salary exceeds the company’s £133,300 profit. This is a valid modelling edge case showing that a salary above profit is not feasible — the Optimiser would never recommend this, but it appears in the comparison to show the full range.
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Comparison Report — Consolidated statement

The Consolidated statement is the summary view combining personal and company positions. It shows four lines: Company retained income (profit staying inside the company), Personal net income after tax (take-home), Net pension wealth increase (the net wealth impact of pension contributions), and Combined net wealth (the sum of all three). This is the single number the Optimiser maximises. In this example the optimal column shows £115,716 combined — significantly higher than the left outlier (£89,513) and far higher than the right outlier (£21,836, which is negative after accounting for the impractical £200,000 salary).

Consolidated statement showing four columns: Left outlier combined £89,513, Right outlier combined £21,836, Manual combined £97,071, Optimal combined £115,716
The manual column (£97,071) shows what the accountant’s suggested split of £50,000 salary / £12,500 dividend achieves — nearly £19,000 less combined net wealth than the optimal. This is the value of running the Optimiser.
Track 3 · T1 of 7