LoadingLoadingLoadingLoadingEnter your annual business profit before any owner pay. We'll show what a sole trader would take home against a limited company paying a salary at the personal allowance and the rest as dividends. This compares two business structures — it is not a PAYE salary take-home calculator.
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This comparison is unavailable while the figures are unverified
A take-home comparison needs twenty-two figures — the personal allowance and its taper, three income tax bands and rates, two National Insurance regimes, corporation tax with marginal relief, and the dividend allowance and rates — all agreeing with each other for one tax year. We have not been able to read those off GOV.UK, and we are not going to run twenty-two unverified numbers and present the answer as a comparison. The explanation below still stands, and the sources are linked.
Income tax rates and personal allowances — GOV.UKThis comparison is only as good as the profit figure you put into it. Cushty tracks revenue, costs and margin per job, so that number comes from your jobs rather than a guess.
See job managementThe general rule of thumb that 'limited companies are more tax-efficient' has gotten less true every year since 2016. The dividend allowance has shrunk from £5,000 to £500, dividend tax rates have gone up, and 2024's NI changes for the self-employed (Class 2 abolished, Class 4 cut from 9% to 6%) closed the gap further. The crossover where a limited company starts beating a sole trader is real, but it's higher than most people think.
Beyond the headline take-home, there are reasons people choose ltd that don't show up in this calculator — limited liability, pension contributions through the company, the option to retain profit and pay it out in a lean year, splitting income with a spouse who's a shareholder. And reasons people stay sole trader — simpler accounts, no Companies House filings, ability to use the trading allowance and cash basis. The take-home figure is one input, not the answer.
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