Salary
Salary is a deductible cost for the company and builds your State Pension record. Many directors set salary around the personal allowance. Where employer National Insurance applies, the Employment Allowance can offset it, but not for companies whose only employee is a single director.
Dividends
Dividends are paid from post-tax profits and are taxed on you at dividend rates above the £500 allowance. They can only be paid when the company has enough retained profits, so up-to-date bookkeeping matters.
Pensions
Company pension contributions are usually deductible for corporation tax and free of National Insurance, which makes them one of the most efficient ways to extract profit if you don't need the cash now.
Review it every year
Rates and allowances change regularly, so the right mix changes too. We review each director's position before the year end so you can decide in good time.