Locum doctor on £230,000

Personal Ltd Co. Age 58. Pension preference: aggressive.

Every figure on this page is computed at build time by the same engines that power the live salary–dividend split, take-home and SIPP optimiser calculators. Inputs come from a single CSV row; outputs come from the engines. No static lookup tables, no hand-coded numbers.

Net cash

£97,917

Pension

£60,000

Effective rate

31.3%

Marginal rate

39.4%

How HMRC defines the band this income falls into

A locum doctor at £230,000 of gross for 2026/27 — plus any other personal income that stacks below — falls into the additional-rate band. HMRC's published rules for this band are unchanged from the figures announced in the Autumn Budget 2024 (which froze all the major thresholds at their April 2021 levels until at least April 2028).

For reference, the 2026/27 boundary numbers as published by HMRC:

Personal Allowance: £12,570 (full PA — tapered above £100,000 adjusted net income).
Basic-rate band: £12,570 to £50,270 (20% income tax, 8.75% dividend tax).
Higher-rate band: £50,270 to £125,140 (40% / 33.75%).
Additional-rate band: above £125,140 (45% / 39.35%).
PA taper: £1 of PA lost per £2 over £100,000 adjusted net income, fully eroded at £125,140.
Employer NI: 15% above the £5,000 Secondary Threshold (Finance Act 2024).
Employee NI: 8% main band (£12,570–£50,270), 2% above.
Class 4 NI (sole traders): 6% main band, 2% above. Class 2 voluntary: £3.45/week (£179.40/yr).
Corporation Tax: 19% small profits rate (≤ £50,000), 25% main rate (≥ £250,000), 26.5% effective marginal in between.
Dividend Allowance: £500 at 0%.
Pension Annual Allowance: £60,000 (tapered to £10,000 above £260,000 adjusted income).

For this specific row, the binding constraints are: the corporation-tax marginal-relief band (26.5% effective marginal CT) on the company side, and the £100k Personal Allowance taper on the personal side.

The engine's computed bottom line for this row, given those binding constraints: net cash £97,917, pension £60,000, effective rate 31.3%, marginal rate 39.4%.

The numbers, line by line

Optimum salary	£5,000
Optimum dividend	£125,025
Optimum pension	£60,000
Net cash (optimum)	£97,917
Net wealth (cash + pension)	£157,917
Rule-of-thumb net cash	£124,522
Rule-of-thumb net wealth	£124,522
Saving vs rule of thumb	£33,394
Effective rate on profit	31.3%
Marginal rate (next £1 dividend)	39.4%
Years to age-57 pension access	0
Annual pension contribution (this row)	£60,000
Projected pot at 57 (5% real, single-path)	£0
Sustainable income @ 4% SWR	£0/yr

Why this scenario is different

Compared to the closest peer profile — Software contractor at £220,000 — this scenario sits £10,000 higher on gross income. That moves net cash by +£4,349, the pension contribution by +£0, and the effective rate by +1.1%. The effective rate moves only modestly — both scenarios sit inside the same binding tax band. The optimiser shifts £7,350 of the extraction into the dividend slice, and £0 out of pension contributions.

Questions this scenario raises

Why is the effective rate lower than the headline tax brackets?

Because the headline 20% / 40% / 45% rates apply only to the income slice in each band — not the whole income. The Personal Allowance shelters the first £12,570 at 0%; the basic-rate band only charges 20% on the next £37,700; and so on. The effective rate on the entire income is the weighted average of every slice — typically much lower than the headline number people quote.

Is the State Pension worth deferring?

For State Pensions claimed after 6 April 2016, deferring uplifts the entitlement by 1% for every 9 weeks deferred (about 5.8% per year). The break-even is approximately 17 years — if you expect to live materially longer than 17 years after State Pension Age, deferring marginally wins. Most people claim on time and invest the cash instead.

What if I have rental income alongside this self-employment?

Add it to the `otherIncome` field of the calculator. Property income is taxed at non-savings, non-dividend rates (so stacks alongside salary in the band schedule). The first £1,000 of rental income can also be sheltered by the separate Property Allowance under FA 2017 s.16.

How do I model my partner's income alongside mine?

BracketMath models a single tax entity — there is no joint-couple calculation. For couples, the practical approach is to run each partner separately and consider income-splitting strategies (employing the lower-earning spouse for genuine work performed, sharing dividends if both are shareholders, etc). The Ltd Co spousal share pattern is sketched in /guides/ltd-company-director-tax.

Why does the optimiser pay a salary above £5,000 if employer NI starts there?

Because beyond the £5,000 Secondary Threshold, each £1 of salary still saves 19–25% of corporation tax and only costs 15% in employer NI plus 8% employee NI — a net 11–17% saving up to the £12,570 Personal Allowance. The 2026/27 optimum for this row is £5,000 of salary, sitting in exactly this regime.

Methodology

Income tax, National Insurance and Corporation Tax bands taken from HMRC's 2026/27 rates and allowances tables (gov.uk/.../income-tax; corporation-tax). Pension Annual Allowance and taper rules from Finance Act 2004 / 2023. Trading allowance per ITTOIA 2005 s.783A. Voluntary Class 2 figure (£179.40/yr = £3.45/wk × 52) from HMRC voluntary NI guidance.

Style: 2026/27 tax year throughout; figures rounded to whole pounds in the user-facing prose; effective rates computed as (deductions / gross). The voice is methodological — no first person, no claimed credentials, no marketing fluff.

This page is not personalised advice; for advice regulated by the FCA, consult an adviser registered with the Financial Conduct Authority. See the full disclaimer.