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How much salary should I take from my business?

Shared from Tax Insider: How much salary should I take from my business?
By Alan Pink, April 2022

Alan Pink considers the impact of recent changes in tax rates and rules on the ‘optimum’ salary for owner-managers. 

At first sight, it seems like an odd question: “what is the optimum salary I can receive?” For most people, the answer is clear: “as much as my employer will pay!” But the considerations are very different for people who own and manage their own business, because people in this position have a choice as to the type of income they take.  

The situation I’ll be considering here is where a business is being run by a limited company, and the same people are the directors and shareholders – an extremely common situation in UK business. The considerations are completely different if the business is unincorporated (or deemed to be so). 

Because of the legal fiction that a company is a separate person from its directors and is employing them, the directors are

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