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What Is The Optimal Directors Salary for 2021/22

The new personal financial year starts on April 6th, 2021. Thresholds have changed the optimal directors salary.

The New Optimal Directors Salary is £736 a Month. To remain in the basic tax payer rate of 7.5% on dividend, you can take £41,430 in dividend within the year on top of your new salary of £8,840.

With this total take home amount of £50,270, you will need to pay £2,667.5 in tax (provided you do not have any other sources of income).

What Else Has Changed?

  • National minimum wage has increased to £6.56 – £8.91 depending on age
  • The higher income threshold has increased to £50,270
  • Covid support system, furlough, has been extended to September 30th 2021

We can help with your your payroll – let us know you would like to change to this new salary amount starting April 5th, 2021 and we can set you up using Xero Payroll.