Optimal Salary

[AnthonyQuinn]

If you are outside IR35 what hould you pay yourself to maximise your income. Knowing that corporate tax (Before you can pay yourself dividend) is 20% and tax on dividend is 9%, what should you pay yourself to maximise your income. Your salary should be below the point where incremental tax starts being > 29%.

Any ideas??

[Gonzo]

If you are outside IR35 what hould you pay yourself to maximise your income. Knowing that corporate tax (Before you can pay yourself dividend) is 20% and tax on dividend is 9%, what should you pay yourself to maximise your income. Your salary should be below the point where incremental tax starts being > 29%.

Any ideas??

I would take the advice of my accountant - afterall, that is what I pay them for. They should be able to provide more accurate figures too because your's don't look correct to me.

Then again, different accountants do have different opinions.

Some say pay yourself salary below the Tax and National Insurance thresholds and the rest as dividends because that minimises the tax bill.

Others recommend National Minimum Wage as salary, this does increase your tax bill by about £1000 per year over the previous option.

Some people pay themselves the market rate and take the rest as dividends because they just love paying tax.

[ASB]

In additon to what Gonzo said it is useful to remember other income as well. The idea being that you total Schedule E income should use your personaly allowances.

[PhilAtBFCA]

Director's Salary

AnthonyQuinn

This link is to an article that explains how you can work out the best salary for your circumstances, and describes the 7 factors that you need to consider when making your decision.

Phil

[ASB]

AnthonyQuinn

This link is to an article that explains how you can work out the best salary for your circumstances, and describes the 7 factors that you need to consider when making your decision.

Phil

Excellent link Phil.