Limited Company Profit Calculator UK
Trace your company’s money the whole way — from revenue and expenses, through Corporation Tax, to the take-home that actually reaches you — and see how much of every pound survives the journey.
Working out a limited company’s profit is only half the story — what most owners really want to know is how much of their revenue ends up in their own pocket. This calculator follows the full chain: revenue minus expenses and salary gives the profit, Corporation Tax (19–25%) takes its share, and what’s left becomes dividends taxed again before it reaches you. On £120,000 of revenue with £20,000 of expenses, a typical owner-director keeps around £66,900 — about 56% of the revenue, after every tax along the way. The figure that surprises people most: spending £10,000 on a genuine business expense reduces your take-home by under £5,000, because the expense saves Corporation Tax and dividend tax it would otherwise have attracted. This calculator shows where each pound goes, why the share you keep falls as revenue rises, and how expenses really affect your bottom line. To compare being a company at all, use the Sole Trader vs Ltd Calculator; for the salary side, the Salary vs Dividend Optimiser.
Company income and costs
Director extraction
Personal tax assumptions
Planning view
Limited company result
Estimated company profit after tax
Calculating…
Calculating…
Personal take-home
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Corporation Tax
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Dividends withdrawn
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Dividend tax
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Retained profit
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Total tax estimate
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Limited company profit — quick lookup
The left table follows revenue all the way to take-home, showing the profit after Corporation Tax and the share of revenue you keep. The right breaks a single £120,000 of revenue into where each pound ends up. Both assume a tax-efficient salary and the balance taken as dividends. The calculator runs your own revenue and expenses.
| Revenue | After CT | Take-home | Kept |
|---|---|---|---|
| £50,000 | £29,930 | £39,925 | 80% |
| £80,000 | £52,959 | £57,124 | 71% |
| £120,000 | £82,359 | £76,602 | 64% |
| £160,000 | £111,759 | £96,079 | 60% |
| £200,000 | £141,159 | £113,956 | 57% |
| Destination | Amount | Share |
|---|---|---|
| Expenses | £20,000 | 17% |
| Salary + NI | £13,049 | 11% |
| Corporation Tax | £19,292 | 16% |
| Dividend tax | £13,366 | 11% |
| Your take-home | £66,863 | 56% |
Left table has zero expenses to isolate the tax; the right adds £20,000 of expenses, which is why the percentages differ. Notice how the share you keep falls as revenue rises — from 80% at £50,000 to 57% at £200,000 — as more profit is taxed at higher Corporation Tax and higher dividend rates. Tax is progressive even for companies.
How company profit becomes your take-home
A limited company’s money passes through a fixed sequence before any of it reaches you, and each step takes a cut. Understanding the chain is what lets you see why two businesses with the same revenue can leave their owners with very different amounts — and why the headline profit figure isn’t the money in your pocket.
Step one — revenue to profit
Start with revenue — everything the company invoices. From that, deduct allowable business expenses and the director’s salary and employer National Insurance, all of which are deductible. What remains is the taxable profit. This is the figure Corporation Tax is charged on, and the more genuine costs you have, the lower it is — which, as we’ll see, is why expenses are cheaper than they look.
Step two — Corporation Tax
Corporation Tax is charged on the profit at 19% up to £50,000, rising via marginal relief to 25% above £250,000. This is the company’s tax, paid before any money is distributed. What’s left after Corporation Tax is the distributable profit — the pot available to pay out as dividends.
Step three — getting it to you
To move the distributable profit into your own hands, you pay dividend tax at 8.75%, 33.75%, or 39.35% after the £500 allowance. Combined with the small salary (taken tax-efficiently at the personal allowance), this is your take-home. The double layer — Corporation Tax then dividend tax — is why a company keeps less of each pound as profits climb, and why the effective rate on your money is higher than the headline Corporation Tax rate alone suggests.
Worked examples
Four scenarios showing how revenue, expenses, and scale shape the profit that reaches you.
Scenario 1 · Small company, £50k revenue
Keeping most of it
Profit before CT £36,951 · CT £7,021 (19%)
Take-home: £39,925 (80% of revenue)
At lower profits, the company is efficient — Corporation Tax sits at 19% and most dividends fall in the basic-rate band at 8.75%. The owner keeps about 80% of revenue. This is the sweet spot where a company works hardest: enough profit to benefit from the structure, not so much that higher rates start biting. Small companies keep a generous share.
Scenario 2 · Established company, £120k revenue
The full chain in action
Profit before CT £86,951 · CT £19,292 · div tax £13,366
Take-home: £66,863 (56% of revenue)
A typical established one-person company. After £20,000 of genuine expenses, a small salary, Corporation Tax, and dividend tax, the owner keeps £66,863 — about 56% of revenue. Each layer is visible: 17% to expenses, 11% to salary and NI, 16% to Corporation Tax, 11% to dividend tax. The take-home is comfortable, but well below the headline revenue.
Scenario 3 · The expense that costs less
Why £10,000 of kit isn’t £10,000 lost
£120k revenue, £10k expenses: take-home £71,733
Real cost of the £10k spend: £4,869
Spend £10,000 on genuine business costs and your take-home falls by only £4,869 — not £10,000. The expense reduces taxable profit, so it saves the Corporation Tax and dividend tax that money would otherwise have attracted. A genuine business expense effectively costs you a little under half its sticker price. This is the most useful, least understood fact about running a company.
Scenario 4 · High earner, £200k revenue
The share keeps shrinking
Profit before CT £186,951 · CT £45,792 (marginal/25%)
Take-home: £113,956 (57% of revenue)
At £200,000 the owner keeps just 57% of revenue. Corporation Tax has climbed toward 25% through marginal relief, and large dividends are taxed at the higher 33.75% rate. The more you earn, the smaller your slice — which is why high earners look hard at pension contributions, retaining profit, and other ways to soften the top-end tax rather than simply drawing everything as dividends.
The profit waterfall — and why expenses cost less than they look
The single most useful thing to grasp about a limited company isn’t a tax rate — it’s how the deductible chain changes the real cost of spending. Most owners think an expense costs what it costs; in fact it costs far less. Here’s the logic, step by step:
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Every deductible pound lowers taxable profit
Expenses and salary come off revenue before Corporation Tax. So £1 of genuine expense reduces the profit that’s taxed, not just your cash. The company never pays Corporation Tax on money it spent on the business.
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2
That saves Corporation Tax at 19–25%
Lower taxable profit means a smaller Corporation Tax bill. At 19%, every £100 of expense saves £19 of Corporation Tax straight away. The expense has effectively given you a discount equal to your Corporation Tax rate.
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And it saves the dividend tax on top
Money spent as an expense is never distributed as a dividend, so it also escapes dividend tax. The combined Corporation Tax and dividend tax saving is why £10,000 of spending costs your take-home under £5,000.
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But only genuine business expenses count
The relief is real only for costs wholly and exclusively for the business. Personal spending dressed up as company expense is not deductible, and treating it as such risks tax, penalties, and a benefit-in-kind charge. The saving is a reward for real costs, not a loophole.
£10,000 of genuine expenses — the true cost
What spending £10k actually does to your take-home:
The takeaway is genuinely useful: a limited company is a partial discount on every legitimate cost of doing business. That £10,000 of equipment, software, or professional fees costs your pocket under £4,900, because the taxman effectively funds the rest through the Corporation Tax and dividend tax you no longer pay. It’s why owners are encouraged to run genuine costs through the company rather than paying personally — and why the headline price of a business purchase overstates what it really costs you. The crucial caveat is “genuine”: the relief only applies to costs wholly and exclusively for the business, and stretching that definition turns a legitimate saving into a tax risk.
Why the share you keep falls as you grow
The tables show a clear pattern: 80% of revenue kept at £50,000, falling to 57% at £200,000. This isn’t a mistake — it’s the progressive nature of the tax. As profits rise, Corporation Tax climbs from 19% toward 25% through marginal relief, and dividends move from the 8.75% basic rate into the 33.75% higher rate. Each extra pound of profit is taxed harder than the last, so your effective rate creeps up and your retained share falls. It’s why scaling revenue doesn’t scale take-home one-for-one, and why higher-earning owners look to pensions and profit retention to manage the top slice rather than drawing it all as dividends.
Two scenarios that change the picture
What if…
You ran a £10,000 cost through the company?
What if…
You doubled revenue from £100k to £200k?
Key limited company profit terms explained
Following profit from revenue to your pocket means meeting accounting and tax terms that are easy to confuse. The ten below cover what you’ll encounter reading your company accounts and working out your real take-home.
- Revenue turnover
- The total your company invoices for its goods or services before any costs. The top line of the profit chain, and the figure people often mistake for what they earn — it’s only the starting point.
- Allowable expenses
- Costs incurred wholly and exclusively for the business, deductible from revenue before tax. Because they cut taxable profit, a genuine expense costs you far less than its sticker price — under half, once the tax saving is counted.
- Profit before tax
- Revenue minus all allowable costs, including salary and employer NI. The figure Corporation Tax is charged on — not the same as the cash you can take out, and not your personal income.
- Corporation Tax
- The company’s tax on its profit: 19% up to £50,000, rising via marginal relief to 25% above £250,000. Paid before any profit is distributed, it’s the first major slice taken from the chain.
- Marginal relief
- The mechanism that tapers Corporation Tax from 19% to 25% on profits between £50,000 and £250,000, so the effective rate rises gradually. It’s a key reason your retained share of revenue shrinks as the company grows.
- Distributable profit
- The profit remaining after Corporation Tax, available to pay as dividends — including profit retained from earlier years. You can only legally pay dividends from this; paying more is an unlawful dividend.
- Dividend
- A payment of distributable profit to shareholders. Taxed at 8.75%, 33.75%, or 39.35% after a £500 allowance, with no National Insurance — the main way most owner-directors take their income.
- Retained profit
- Profit the company keeps rather than distributes, having paid only Corporation Tax on it. Leaving profit in the company and extracting it later, or via a pension, is a way to defer or reduce the dividend tax.
- Director’s loan
- Money taken from the company that isn’t salary, dividend, or expense repayment. An overdrawn director’s loan can trigger tax charges, so it’s not a free way to extract cash — a common trap for new directors.
- Take-home
- The amount that actually reaches you personally after Corporation Tax, dividend tax, and the tax on your salary. The real bottom line — typically 56–80% of revenue depending on scale and expenses.
Five mistakes owners make with company profit
Understanding profit is where company owners most often slip — confusing profit with income, or misjudging tax. These five errors, drawn from the recurring r/SmallBusinessUK and r/UKPersonalFinance threads, are the costly ones.
Treating company profit as your own money
Company profit belongs to the company, not to you. To get it out you pay Corporation Tax and then dividend tax — so the profit figure is not your spendable income. New directors who spend company money as personal cash can face tax bills and an overdrawn director’s loan. Keep business and personal money strictly separate.
Cost: surprise tax and director’s loan charges Fix: only spend money you’ve drawn out properlyOverstating expenses to cut tax
Genuine expenses save tax, but only if they’re wholly and exclusively for the business. Putting personal costs through the company isn’t a clever saving — it’s a risk of tax, penalties, and a benefit-in-kind charge. The relief is generous enough on real costs that there’s no need to stretch the definition. Claim what’s genuine, nothing more.
Cost: penalties and benefit-in-kind charges Fix: claim only genuine business expensesNot setting aside the Corporation Tax
Corporation Tax isn’t due until months after the year end, so the cash sits in the account looking spendable — until the bill arrives. Owners who draw or spend the tax money then scramble to pay. Set aside roughly 19–25% of profit as it’s earned, in a separate pot, so the bill is covered when due.
Cost: a Corporation Tax bill you can’t cover Fix: ring-fence ~20% of profit for the taxPaying dividends the company hasn’t earned
Dividends can only come from distributable profit — profit after Corporation Tax, including retained reserves. Declaring a dividend the company doesn’t have the profit to cover is unlawful, and HMRC can reclassify it as salary or a director’s loan, triggering tax and penalties. Check there’s sufficient profit before declaring.
Cost: unlawful dividend, reclassified and taxed Fix: confirm distributable profit firstDrawing everything as dividends at high profit
As profits climb, dividends move into the 33.75% higher rate, so taking it all out is increasingly costly. Owners who ignore pension contributions and profit retention pay more tax than they need to. At higher profits, leaving money in the company or paying it into a pension can be far more efficient than drawing it all as dividends.
Cost: needless higher-rate dividend tax Fix: use pensions and retention at high profitFrequently asked questions
How do I calculate my limited company’s profit?
Take your revenue and subtract all allowable costs — business expenses, your salary, and employer National Insurance. What’s left is your profit before tax, the figure Corporation Tax is charged on.
But profit isn’t your take-home. After Corporation Tax (19–25%), the remaining distributable profit is paid out as dividends, which are taxed again. On £120,000 of revenue with £20,000 of expenses, the profit before tax is around £87,000, and the owner’s actual take-home is roughly £66,900. The calculator follows the whole chain.
How much of my revenue do I actually keep?
Typically between 56% and 80%, depending on scale and expenses. At £50,000 of revenue an owner keeps about 80%; at £200,000, around 57%. The share falls as you grow because Corporation Tax rises toward 25% and dividends move into the higher 33.75% rate.
This is the progressive nature of the tax — each extra pound of profit is taxed harder than the last. It’s why doubling revenue doesn’t double take-home, and why higher earners look at pensions and profit retention to manage the top slice.
Why does a business expense cost less than its price?
Because a genuine expense reduces your taxable profit, so it saves the Corporation Tax and dividend tax that money would otherwise have attracted. Spend £10,000 on a real business cost and your take-home falls by under £5,000 — the tax saving covers the rest.
Effectively, a limited company is a partial discount on every legitimate cost of doing business. The crucial condition is that the cost must be wholly and exclusively for the business; personal spending dressed up as a company expense isn’t deductible and risks penalties.
What’s the difference between profit and take-home?
Profit is what the company earns after costs, before Corporation Tax. Take-home is what reaches you personally after Corporation Tax, dividend tax, and the tax on your salary. They’re very different numbers.
A company with £87,000 of profit before tax might leave its owner with around £66,900 in the hand — the gap is the Corporation Tax and dividend tax. Treating the profit figure as your spendable income is one of the most common and costly mistakes new company owners make.
How much Corporation Tax will my company pay?
19% on profits up to £50,000, rising via marginal relief to 25% above £250,000. So a company with £40,000 of profit pays £7,600; one with £100,000 pays around £22,750 once marginal relief is applied.
Corporation Tax is the company’s tax, paid before any profit is distributed to you, and it’s only the first layer — dividend tax then applies when you take the money out. Set aside roughly 19–25% of profit as you earn it so the bill is covered when due.
Can I take all the profit out of my company?
You can only pay dividends from distributable profit — profit after Corporation Tax, including reserves retained from earlier years. You can take it all if the profit and cash exist, but you’ll pay dividend tax on it, and at higher profits much of it falls in the 33.75% band.
You don’t have to extract everything: leaving profit in the company (taxed only at Corporation Tax) and taking it later, or paying it into a pension, can be more efficient. Drawing it all as dividends at high profit often means paying more tax than necessary.
Should I leave profit in the company or take it out?
It depends on whether you need the cash. Taking it out as a dividend costs dividend tax — up to 39.35% at the top. Leaving it in costs only Corporation Tax, deferring the dividend tax until you extract it later, perhaps in a lower-income year.
Retaining profit, or routing it into a pension, is a common way for higher-earning owners to soften the top-end tax. If you need the income now, you take it; if you don’t, leaving it in the company is often the more efficient choice. An accountant can tailor this to your situation.
Do I need an accountant to work out company profit?
This calculator gives a clear estimate of the chain from revenue to take-home, but a limited company must file annual accounts and a Corporation Tax return, and the rules around expenses, dividends, and director’s loans have detail this can’t fully capture.
Most company owners use an accountant for the filings and to optimise the salary, dividends, and pension contributions. The accountancy cost — typically £1,000–£2,000 a year — is itself a deductible expense. For official guidance, see gov.uk.
Related calculators
Company profit connects to whether to be a company at all, the taxes within the chain, and how you extract the money. These calculators handle each piece.
Methodology & sources
How the maths works
The calculator follows the standard chain. It deducts allowable expenses, the director’s salary, and employer National Insurance from revenue to give the profit before Corporation Tax (all three are allowable against Corporation Tax). It applies Corporation Tax to that profit — 19% up to £50,000, marginal relief between £50,000 and £250,000, and 25% above — to give the distributable profit. That profit is then treated as dividends, taxed after the £500 allowance at the dividend rates, stacking on top of the salary through the bands. Take-home is the salary (net of its Income Tax and employee National Insurance) plus the dividends net of dividend tax. The “real cost” of an expense is the fall in take-home when the expense is added, which is less than the spend because of the tax it saves.
These are illustrative figures to show how the profit chain behaves. Real outcomes depend on your exact revenue, expenses, salary choice, other income, pension contributions, and the tax year’s rates, all of which change. The aim is to reveal where each pound goes and why expenses cost less than their price, not to replace tailored accountancy advice or your filed accounts.
Assumptions and conventions used
- Profit before tax: revenue − expenses − salary − employer NI
- Corporation Tax: 19% to £50k, marginal relief to £250k, 25% above
- Salary: assumed at the £12,570 personal allowance (tax-efficient)
- Dividends: distributable profit, taxed 8.75% / 33.75% / 39.35% after £500
- Employer NI: 13.8% above £9,100 (Employment Allowance not assumed)
- Expense relief: real cost = spend less Corporation Tax and dividend tax saved
- Company assumed to be the director’s only income unless stated
- Rates and thresholds shown are illustrative current UK figures