--- title: Your three ways to take money from the company description: Your three ways to take money from the company --- [Skip to content](https://help.1stformations.co.uk/accounting-service/your-three-ways-to-take-money-from-the-company#main-content) [![image 4](https://help.1stformations.co.uk/hubfs/image%204.svg)](https://www.1stformations.co.uk/) - [Help Centre](https://help.1stformations.co.uk/) Open main navigation Close main navigation - [Help Centre](https://help.1stformations.co.uk/) - [Login](https://www.1stformations.co.uk/login/) [Login](https://www.1stformations.co.uk/login/) How can we help you? - There are no suggestions because the search field is empty. 1. [Accounting Service](https://help.1stformations.co.uk/accounting-service?hsLang=en-gb) 2. [Personal Tax for Directors](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb) 3. [Drawing Money from Your Company](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#drawing-money-from-your-company) # Your three ways to take money from the company ## The three most common ways to take money out of a limited company - explained As a director-shareholder, there are several ways to extract money from your company. The three most common are salary, dividends, and director's loan repayments, each with different tax implications. Other routes exist too, such as charging interest on money you have lent the company or a return of capital, which we can advise on where relevant. ### Salary Salary is the most straightforward route: set through payroll, taxed via PAYE, and deductible for Corporation Tax. There is no single correct level, because the most efficient figure depends on your circumstances. Salary up to £12,570 is free of Income Tax and employee National Insurance contributions (NIC); above the £5,000 secondary threshold the company pays employer NIC at 15%, though eligible companies can offset up to £10,500 of this with the Employment Allowance (sole-director companies cannot claim it). A salary at or above the Lower Earnings Limit (£6,708 for 2026/27) secures a state pension qualifying year, and the Corporation Tax relief on salary and employer NIC partly offsets the NIC cost. Because these factors pull in different directions, we calculate and recommend the right salary for you each year as part of our Standard and Scale accounting plans. ### Dividends Dividends are paid from post-Corporation Tax profits, so no NIC applies and the dividend tax rates (10.75% basic rate, 35.75% higher rate, 39.35% additional rate for 2026/27) are charged on top of the Corporation Tax the company has already paid. The first £500 of dividends each year is covered by the dividend allowance. Dividends require formal board minutes and vouchers, and can only be paid from available profits. For many directors, they remain an efficient way to extract profits above salary, though the rates rose in April 2026 and the right salary-and-dividend mix depends on your circumstances, which we review with you. ### Director's loan repayment If you have personally lent money to the company or built up a Director’s Loan Account credit (by expenses paid personally or salary left in the company), you can withdraw this tax-free at any time. It is not income; it is repayment of a debt the company owes you. 💡 **Good to know:** Most directors use all three mechanisms. A small salary uses the personal allowance, dividends extract profits tax-efficiently, and Director’s Loan Account repayments return any capital contributed. We can advise on the right combination for your specific situation each year. ### Not found what you're looking for? 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