The usual shape is a modest salary set around the National Insurance thresholds, with the balance taken as dividends. The salary does two useful things: it is deductible against corporation tax, and it preserves your National Insurance record for the state pension, which a dividend does not. Set it too low and you can lose a qualifying year for the sake of a small saving — a bad trade. Above that, dividends are taxed at lower rates than salary and carry no National Insurance. The exact optimal figure moves with each year’s thresholds and allowances, and it changes if you have other employment income, if the company can claim the employment allowance, or if there are multiple directors. It is worth revisiting annually rather than setting once and forgetting.