Senior accountant on £130,000

Personal Ltd Co. Age 52. 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

£51,935

Pension

£60,000

Effective rate

13.9%

Marginal rate

33.8%

How HMRC defines the band this income falls into

A senior accountant at £130,000 of gross for 2026/27 — plus any other personal income that stacks below — falls into the gap between the PA taper and the additional-rate threshold. 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 £51,935, pension £60,000, effective rate 13.9%, marginal rate 33.8%.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£45,126
Optimum pension	£60,000
Net cash (optimum)	£51,935
Net wealth (cash + pension)	£111,935
Rule-of-thumb net cash	£80,972
Rule-of-thumb net wealth	£80,972
Saving vs rule of thumb	£30,963
Effective rate on profit	13.9%
Marginal rate (next £1 dividend)	33.8%
Years to age-57 pension access	5
Annual pension contribution (this row)	£60,000
Projected pot at 57 (5% real, single-path)	£331,538
Sustainable income @ 4% SWR	£13,262/yr

Why this scenario is different

Compared to the closest peer profile — IT contractor at £130,000 — this scenario sits £0 higher on gross income. That moves net cash by +£0, the pension contribution by +£0, and the effective rate by +0%. The effective rate moves only modestly — both scenarios sit inside the same binding tax band. The optimiser shifts £0 of the extraction out of the dividend slice, and £0 out of pension contributions.

Questions this scenario raises

Should I take the £12,570 standard director salary?

For this row the optimiser settled on a salary very close to the £12,570 standard — confirming the rule of thumb works here.

What happens if I retain profit in the company instead of extracting it?

The optimiser models full extraction (max-extraction mode). Retaining profits inside the company defers the dividend-tax slice but pays corporation tax now. If the retained cash is invested at company-level the returns face corporation tax annually. If the company is later sold and qualifies for Business Asset Disposal Relief, retained profits can be extracted at 10% CGT — but BADR rules and the lifetime allowance keep tightening (currently £1m lifetime cap). For most contractors, extract now is the right call.

Are dividend tax rates rising in 2026/27?

No — the 8.75% / 33.75% / 39.35% rates were set in 2022 and have been held flat through 2026/27. The Dividend Allowance has been reduced from £2,000 (2022/23) to £500 (2024/25 onwards) which has the same effect as a ~£175 tax rise at any rate band. This figure is built into every dividend-related calculation on the site.

Is the figure on this page net of accountancy fees?

Yes when relevant — the take-home calculator deducts an umbrella fee for inside-IR35 rows (£1,500/yr assumed) and the optimiser allows for an arbitrary annual business expense pot (£3,500/yr default for Ltd Co rows). Sole-trader rows assume the higher of £800/yr or 5% of turnover as actual business expenses, which approximates a low-overhead service business.

Are dividends "double taxed" because corporation tax was already paid?

Yes — but the dividend tax rates (8.75% / 33.75% / 39.35%) are set lower than the equivalent income-tax rates (20% / 40% / 45%) precisely to account for the corporation tax already paid at company level. The combined CT + dividend tax stack is usually still cheaper than the salary stack of income tax + employer NI + employee NI for any single £1, which is why the optimiser puts most extraction through dividends.

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.