Salary vs Dividends Calculator

Company profit

The annual profit available to pay yourself, before salary or dividends.

Why would I ever take a salary if dividends have a flat, predictable rate?

Because personal income tax starts at 0%, not 41.6%. Thanks to the primary rebate, roughly the first R95 750 of salary each year is tax-free, and the brackets after that start at 18%. Dividends are taxed at a flat combined rate of about 41.6% (27% company tax, then 20% dividends tax on what's left) from the first rand. A salary within the lower brackets usually beats that.

What does this calculator assume?

That the salary is your only taxable income for the year, that all after-tax company profit not paid as salary is distributed as a dividend, and that no other deductions apply: no medical aid credits, retirement annuity contributions, or other income. It uses 2025/2026 tax brackets and the current UIF earnings ceiling. Your actual position may differ.

Does a salary give me anything a dividend doesn't?

Yes. A salary builds UIF entitlement if you are retrenched, gives you provable income for a bond or loan application, lets you contribute to a retirement fund, and can be paid even in a year the company's cash flow does not support a dividend declaration.

Is dividends tax the final tax on that money?

For South African tax residents, yes. Dividends tax is a final withholding tax deducted by the company before you receive the dividend. It is not added to your taxable income again on your personal return.

Should I speak to an accountant before deciding?

Yes. This is a planning estimate to show the shape of the trade-off. Your specific situation can shift the right split for you, including other income, retirement contributions, a pending loan application, or the company's own cash flow needs.