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Director's Pay vs Dividends Calculator

Compare paying yourself as a salary vs dividends from your NZ company. Includes PAYE/ACC/KiwiSaver on salary vs imputation credits on dividends.

Updated 2026-27 FYData stays on your deviceIRD sourced data

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available IRD data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

Frequently Asked Questions

Should I pay myself a salary or dividends from my NZ company?
It depends on your income level and whether you want ACC cover and KiwiSaver employer contributions. Salaries deduct PAYE/ACC/KS automatically and provide certainty around tax obligations. Dividends are paid from after-tax company profit (28% company tax) with imputation credits passing through. For top-rate taxpayers on $200k+ a salary often nets more cash. For mid-rate owners ($60–100k), dividends can be slightly more efficient. A common approach is to pay a market-rate salary plus top up with dividends. Source: Chartered Accountants ANZ.
Are dividends from my own company taxed at 28%?
Not exactly. The company pays 28% tax on profit before any dividend is declared. When you take a dividend, IRD tops up the tax to your marginal rate (e.g. an additional 5 percentage points if you are on 33%). The imputation credits attached to the dividend reduce your personal tax bill. So total tax on a fully imputed dividend equals your marginal rate, not 28%. The 28% only "feels" like the limit if you are on the top 39% bracket and dividends are unimputed. Source: IRD.
Do I need ACC cover if I take only dividends?
Yes, but you have to arrange it separately. If you take only dividends and not a salary, you have no automatic ACC cover for work-related injuries. You can either (1) pay yourself enough salary that you qualify as an "earner" for ACC purposes, (2) arrange CoverPlus or CoverPlus Extra directly with ACC as a non-PAYE earner, or (3) accept that you have no work-injury cover. Most accountants recommend option 1 or 2 for active business owners. Source: ACC — CoverPlus.

NZ company directors who own shares can pay themselves either as a salary (PAYE deducted, ACC and KiwiSaver apply) or as dividends from after-tax company profits (with imputation credits attached). The choice affects total tax paid and obligations like ACC cover and KiwiSaver employer contributions.

How this calculator works

Enter the total amount you want to take from your company and your other income. The calculator compares two scenarios: (1) full salary with PAYE/ACC/KS, (2) full dividend after 28% company tax with imputation credits flowing through.

Salary vs Dividend Comparison

Company tax on profit28%
Salary deductionsPAYE + ACC + KiwiSaver employer
Dividend RWT33% (less imputation credits)
ACC coverSalary: yes; Dividend: no (need separate cover)
KiwiSaver employer 3.5%Salary: yes; Dividend: no

Worked Examples

Take $100,000 from company. Owner has no other income.

Salary nets ~$77,000 (after PAYE/ACC/KS); dividend nets ~$72,000

  1. Salary route: PAYE ~$22,170, ACC $1,750, employer KS $3,500 (extra cost) = ~$77,580 net
  2. Dividend route: company tax 28% = $28,000 already paid, dividend $72,000 with $28,000 imputation credit; further RWT trues up to marginal rate
  3. For top-rate owner, salary often wins on net cash; for mid-rate, dividend can be more efficient

Built and maintained by Konstantin Iakovlev. Data sourced from the IRD and official New Zealand government sources.

Last updated:

Official Sources

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