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Maslins’ 24/25 Salary and Dividend Recommendations

As in previous years, we’ve set out what we believe to be the most efficient salary for contractors and freelancers. The below are suggestions for the 24/25 tax year (starting from 6th of April 2024) and falls outside IR35.

The ‘Most Common’ Situation

We have opted for a salary that will trigger some employer NICs, but not employee NICs. Whilst paying this employer NIC liability will be a small extra hassle, as a Maslins client, we will be in touch to remind you of payment.

For one person companies in 2024/25, we recommend a salary of £1,047/month (as per 23/24). It is the maximum before employee NIC become payable, yet is still sufficient in contributing towards the basic state pension. As mentioned above, there will be a small amount of employer NICs payable on this salary shortly following the tax year.

Based on the salary mentioned above (£12,564 for the year) and no other personal income, you can take dividends of:

  • £506 and suffer no personal tax (0%)
  • £37,706 (i.e. an extra £37,200) and suffer £3,255 personal tax (£37,200 at 8.75%)
  • £87,436 (i.e. an extra £49,730) and suffer £20,038.88 personal tax (the above £3,255, plus £49,730 at 33.75%)

The above thresholds are not hard limits, just the levels above which the marginal rate of tax increases (i.e. the amount of tax suffered on each extra £ of dividends taken). The effective tax rate become increasingly penal on total earnings above £100k at which point you will start to lose your personal allowance.

There will be a handful of clients where the above is of no relevance but we will be in touch with those clients directly over the next 2 weeks.

Other changes and useful information?

Employment Allowance – companies with 2+ staff won’t have any employer NICs to pay, as they will qualify for the employment allowance. Effectively, if your company has 2+ staff, the first £5,000 of employer NICs will be covered by the allowance.

Student Loan/High Income Child Benefit Charge – these aren’t really exceptions as such, but things to be aware of that can increase what you must pay.

If you have an outstanding student loan or claim child benefit, and your total overall income is above the thresholds, then there will be additional charges of loan repayments and/or having child benefit clawed back.

For high income child benefit, this is £60,000, whereas for student loans it depends on the plan:

Plan 1 – £24,990 (9% on earnings above this).

Plan 2 – £27,295 (9% on earnings above this).

Plan 4 – £27,660 (9% on earnings above this).

Postgraduate Loan – £21,000 (6% on earnings above this).


If you don’t want to be overly concerned with the precise details, then the general logic isn’t surprising. In most situations, as personal income goes up, the tax rate goes up.

Also, don’t be concerned about possibly dribbling just above a threshold. For example, if you went £10 into the higher rate band, it just means that the top £10 of your income would suffer 33.75% tax instead of 8.75% on your dividends. There’s no sudden sting for going pennies above a threshold.

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