KiQiCulatorsSelf-employed or limited company?
The same work two ways: sole trader against your own Ltd company, with running costs, use of home, CIS, rent and savings, the total tax each way and the point where a company starts to pay.
Your job now
Your business
Running costs a year
Sole trader or limited company: which pays less tax?
Total tax a year, the same work two ways
Total tax leakage: every tax paid
How each one is worked out
Cash flow: money in your bank
Try other KiQiCulators
Leave my job?
Compare your job with working as a sole trader (with or without CIS) or through your own limited company, and see the day rate you need to earn the same.
Two directors
Two directors in one company, such as a couple: compare small salaries plus dividends with bigger salaries, and see the money left for the family and the total tax paid.
Payslip and salary
See what you take home after income tax, National Insurance, student loan and pension. Compare two salaries side by side.
P60 and tax refund
Put in the figures from your P60 or last payslip and see if HMRC owes you a refund or you still owe tax, with Gift Aid, mileage, uniform and work costs added in.
Self-employed
Your income tax, Class 4 National Insurance and the dates to pay HMRC, with payments on account worked out for you.
CIS
Contractors take 20% (or 30%) off your labour. See your real tax bill and whether HMRC owes you a refund.
Company director
Work out the best mix of salary and dividends for 2026/27, with corporation tax, dividend tax and the dates to pay.
Compare
Put the same money through three ways of working and see which leaves you the most.
How it is worked out
- Sole trader: income tax and Class 4 National Insurance (6% then 2%) on all the profit after running costs, whether you take it or not.
- Limited company: corporation tax (19% to 25%) on the profit after your salary, employer NI and any company pension, then dividend tax on what you take out.
- Money left in the company is not taxed on you yet. It is counted at about 10% tax still to come, for when you take it out later.
- The best choice is the one with the lowest total tax plus the accountant fees, as a company costs more to run.
Questions people ask
At what profit is a limited company worth it?
For 2026/27 it is often somewhere between £40,000 and £60,000 of profit, but it depends on how much you take out, your other income and the accountant fees. The quick check shows the point for you.
Is a limited company always cheaper on tax?
No. Dividend tax went up in April 2026 and a company costs more to run. If you take out all the profit, a sole trader can pay about the same or less.
Can I pay myself less from a company to save tax?
Yes. Profit you leave in the company only pays corporation tax until you take it out, and you can time dividends to stay under £50,270 or £60,000 each year.
Want the real numbers?
These are estimates. Talk to a KiQi accountant about your own situation and the best way to pay yourself.
Estimates only, for UK taxpayers in England, Wales, Scotland and Northern Ireland, using the rates for the tax year you pick at the top. Nothing you type leaves your browser. Not financial advice.