Solicitor on £80,000

Personal Ltd Co. Age 36. Pension preference: modest.

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

£49,013

Pension

£16,000

Effective rate

18.7%

Marginal rate

33.8%

What a solicitor on £80,000 of company profit actually takes home

A solicitor running a personal Ltd Co with £80,000 of profit before director pay (2026/27 rUK rates) can extract that profit as some mix of salary, dividend and employer pension. The joint optimum — the combination that produces the highest net wealth — pays £12,570 as salary, £40,716 as dividend and £16,000 as an employer pension contribution. Total tax + NI through the chain comes to £14,987 — an effective rate of 18.7% on company profit.

The "rule of thumb" baseline — £12,570 salary, no pension, max dividend — leaves £209 on the table at this profit level. That gap is the value of solving the four-band salary problem (LEL / PT / ST / £12,570) jointly with the pension decision rather than picking each one independently.

The five tax lines that produce the optimum

Corporation tax: £9,578 on £50,295 of post-pay profit.
Employer NI: £1,136 on the £12,570 salary (15% above the £5,000 Secondary Threshold).
Employee NI: £0 on the same salary (8% main band, 2% above £50,270).
Income tax: £0 on the salary (rUK bands, after personal allowance).
Dividend tax: £4,273 on the £40,716 dividend (8.75% / 33.75% / 39.35% bands, stacked above salary).

Net cash to the director: £49,013. Pension contribution (locked until age 55, rising to 57 from 6 April 2028 per the Finance Act 2021): £16,000. Net wealth on the all-£1-is-equal view: £65,013.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£40,716
Optimum pension	£16,000
Net cash (optimum)	£49,013
Net wealth (cash + pension)	£65,013
Rule-of-thumb net cash	£56,804
Rule-of-thumb net wealth	£56,804
Saving vs rule of thumb	£209
Effective rate on profit	18.7%
Marginal rate (next £1 dividend)	33.8%

Why this scenario is different

Compared to the closest peer profile — IT contractor at £80,000 — 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

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 do some columns of the table use cash and others use net wealth?

Net cash is the £ that arrive in your bank account. Net wealth includes pension contributions valued at face (£1 of pension = £1 of wealth, since it will eventually be spent — possibly at a lower marginal rate than today). The optimiser uses a `pensionWeight` parameter so the user can adjust the weight; this page sets it according to the row's `pensionPref` (0 / 0.5 / 1.0 for none / modest / aggressive).

What is the £500 Dividend Allowance and how is it used?

The first £500 of dividends in 2026/27 is taxed at 0%. It does not reduce taxable income — it sits as a 0% slice within the band schedule. So a basic-rate dividend recipient with £500 of dividends pays £0; with £600 of dividends pays 8.75% × £100 = £8.75. The £500 is consumed in band order (cheapest band first).

Is this calculation valid for the 2027/28 tax year?

Only partially. Thresholds (PA, basic-rate, higher-rate, NI thresholds) are frozen through April 2028 per the Autumn Budget 2024. Some rates may change at the Spring 2027 Budget. The figures here are accurate for 2026/27 and will be re-run after any future Finance Act changes — check the published-date footer of this page.

Where does the BracketMath engine source its rates?

Income tax / NI / CT / dividend rates come from HMRC's published 2026/27 rate tables (gov.uk/government/publications/rates-and-allowances-income-tax). Pension rules come from FA 2004 and the FCA's consumer guidance. Historical investment returns used in the Monte Carlo engine come from a 125-year UK gilt + UK equity series stored in src/data/historical-returns.json. Every constant carries a source URL in the source code.

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.