Assuming you cannot claim the NI employment allowance because you are the only one employed by your company and you do not fall under IR35
Paying a salary up to the reduced Employer’s National Insurance Threshold of £5,000 is appropriate.
For the 2025/26 tax year this will be £416.66 a month or £5,000 per annum and because of this change, dividends of £45,270 are paid without any higher rate tax (the basic rate band of £50,270 less salary of £5,000).
Therefore, taking this amount as dividends, you’ll have a tax liability calculated below
Dividends of £7,570 are covered by the personal allowance after including your salary of £5,000.
£500 of dividends are covered by the dividend allowance.
The remaining dividends of £37,200 will be taxed at 8.75%. This amounts to the tax liability of £3,255
