Salary vs Dividends: How to Pay Yourself Smarter

The key here is to find the right balance between salary and dividend and figure out a way to maximize your take home pay while minimizing your tax liability. So how do you get money out of the company? Number one, salary. You can pay yourself a salary which is subject to income tax national insurance. However, working with a specialist accountant helps you to optimize how much you take in salary. For example, if you receive a salary of 12, 570, it keeps you below the personal tax allowance threshold, meaning that you don't even pay income tax. On that. On that. But again, be careful because when you want to apply for a mortgage or a visa, you may not be able to demonstrate that you make enough money to be eligible. So work with a specialist to sort that out. Number two way to get our money Dividends. So it's paid to your limited company. Of course these dividends are a share of the profits after tax. The key here is to find the right balance between salary and dividend and and figure out a way to maximize your take home pay while minimizing your tax liability. Structuring the income in that way can help you keep more of what you earn.