Director salary and dividend tax planner
Compare ways a company director can take pay as salary and dividends, with the tax, levies and take-home for each.
Directors often choose between salary and dividends. For each scenario enter the company profit before director pay, the monthly salary and the dividend, and the planner works out the PAYE, the employee and employer statutory costs, the corporation tax, the dividend withholding tax and what the director takes home, so you can compare the real cost of each mix.
Company directors, accountants and advisers planning director remuneration, and shareholders who want to compare options.
What is included
- PAYE and statutory costs on the salary
- Employer NSSF and Housing Levy
- Corporation tax on profit after salary
- Dividend withholding tax
- Take-home pay and total tax for each scenario
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How to use it
- Check the Rates sheet, including the dividend withholding rate.
- Add a row for each scenario with the profit, the monthly salary and the dividend.
- Compare the take-home and the total tax and levies.
- Take professional advice before you decide.
Templates are tools to help with your own records. They are not tax or legal advice. Check the figures against official sources before filing or paying.
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What the director salary and dividend tax planner does
Directors often choose between salary and dividends. For each scenario enter the company profit before director pay, the monthly salary and the dividend, and the planner works out the PAYE, the employee and employer statutory costs, the corporation tax, the dividend withholding tax and what the director takes home, so you can compare the real cost of each mix.
Who it is for
Company directors, accountants and advisers planning director remuneration, and shareholders who want to compare options.
How to use the workbook
- Check the Rates sheet, including the dividend withholding rate.
- Add a row for each scenario with the profit, the monthly salary and the dividend.
- Compare the take-home and the total tax and levies.
- Take professional advice before you decide.
- Save a copy under a new name for each month or year, so earlier records stay as they were.
What is inside
- PAYE and statutory costs on the salary
- Employer NSSF and Housing Levy
- Corporation tax on profit after salary
- Dividend withholding tax
- Take-home pay and total tax for each scenario
The workbook has these sheets: Instructions, Scenarios, Rates. The main table has the columns Scenario; Company profit before director pay (year); Monthly salary; Dividend (year); Salary (year); Employee deductions (year); PAYE (year); Employer costs (year). Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.
Tips for getting it right
- Salary is deductible to the company; dividends are not.
- Pay a reasonable salary for the work done.
- Dividends can only come from profits that are available.
- Rates change; check them each year.
Why keep this record
Most tax trouble comes from late or missing records rather than from the tax itself. When the figures are collected as they happen, preparing a return becomes a matter of copying totals, not of searching for receipts. A workbook that follows the same layout as the return also makes it easier to spot a number that looks wrong before KRA does, and to explain it if asked.
Questions people ask
Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.
Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.
Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.
Keeping it safe and up to date
Tax figures change with each Finance Act, so check the Rates sheet against KRA's current guidance before you file. Keep the supporting documents with the workbook, and keep each year's copy for at least five years in case KRA asks for proof.
Read the KRA filing calendar for small businesses for the wider picture. Free calculators that go with it: Dividend interest tax calculator, Corporation tax calculator, Paye calculator. See more tax templates or ask us for a custom one.
The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.
Related guides, calculators and templates
- Free calculator: Tax on Dividends and Interest Calculator
- Free calculator: Corporation Tax Calculator
- Free calculator: PAYE Calculator
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- Guide: Caretakers and property managers: roles, pay and oversight
- Guide: KES 102M SportPesa jackpot: how much KRA takes and what the winner keeps
- Another template: Annual income tax estimator
- Another template: Annual income tax return filing checklist
- Another template: Corporation tax computation workbook
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