Dividend Tax for OnlyFans Creators with a Ltd Company

If your OnlyFans income runs through a limited company, dividends are likely to be the main way you take money out. They’re taxed at lower rates than salary and carry no National Insurance, but they come out of profits that have already been taxed at company level.

So before you decide a Ltd company suits you, compare the total tax and the running costs against staying a sole trader.

Important: this isn’t financial advice. Tax rules change, and everyone’s situation is different. Speak to a qualified accountant before you make decisions about your tax.

What are dividends?

A dividend is a payment a company makes to its shareholders out of its profits. If you’re the director and only shareholder of your Ltd company, you’re paying yourself from what the company has left after Corporation Tax.

Dividends don’t count as salary, so no National Insurance is due on them. That’s their main attraction. The catch is that you can only pay them from profits, and those profits are subject to Corporation Tax.

Why directors pay themselves in dividends

The usual setup for small company directors is a small salary, with everything else taken as dividends. The reason is simple:

• Salary can attract both employer and employee National Insurance.
• Dividends don’t attract any National Insurance at all.

Keep your salary low, take the rest as dividends, and you and your company pay less NI overall. It’s legal, widely used and well understood by HMRC.

Corporation Tax comes first

Before it pays dividends, the company has to allow for the Corporation Tax due on its profits. The current rates are:

• Small profits rate: 19% on profits up to £50,000
• Main rate: 25% on profits above £250,000
• Marginal relief: on profits between £50,000 and £250,000, the effective rate climbs gradually from 19% to 25%. The marginal rate in this band works out at 26.5%.

So a company with £60,000 of profit doesn’t pay a flat 19% on all of it. The first £50,000 is effectively taxed at 19%, and the next £10,000 at the marginal rate. Your accountant will work out the exact figure.

Broadly, what’s left after Corporation Tax is what the company can pay out as dividends. Losses from earlier years reduce that, as the rules further down explain.

The dividend allowance

Everyone gets a dividend allowance of £500 for 2026/27. That’s how much dividend income you can receive each year without paying tax on it. It’s been cut back over the years (it was £2,000 as recently as 2022/23), so it doesn’t save you much now, but it’s worth knowing about.

The allowance still uses up part of your basic or higher rate band. Dividends inside it are taxed at 0%, and it doesn’t add anything to your Personal Allowance.

Dividend tax rates

For 2026/27, the rates that apply from 6 April 2026, dividend income above the £500 allowance is taxed at:

• Basic rate: 10.75% on dividends that fall in the basic rate band
• Higher rate: 35.75% on dividends that fall in the higher rate band
• Additional rate: 39.35% on dividends above £125,140

Those rates are still below Income Tax on employment income in England, Wales and Northern Ireland (20%, 40% and 45%). Scotland has its own Income Tax rates and bands. That gap is why dividends appeal, even though the company has already paid Corporation Tax on the profits.

Until 5 April 2026 the basic and higher rates were 8.75% and 33.75%, so older guides and calculators may be out of date. Rates can change again, so check the current rates on GOV.UK before you plan around these.

How dividends interact with your tax bands

To work out which band your dividends fall in, they’re added on top of your other income.

If you take a salary of £12,570, it uses your whole Personal Allowance. Any dividends on top go into the basic rate band first, then into the higher rate band once your total income passes £50,270.

The first £500 of dividends falls within the dividend allowance and is taxed at 0%. The rest is taxed at the rate for whichever band it lands in.

The salary-plus-dividends strategy

A common approach for creator directors is:

1. Pay yourself a salary at or near the NI threshold. For 2026/27, a salary of about £12,570 a year (the Personal Allowance) is a common choice. If you’ve no other income using up your Personal Allowance, there’s no Income Tax on it and no employee National Insurance. Employer National Insurance has its own threshold, though, so the company may owe some on that salary. Your accountant may adjust the figure because of it.

2. Take the rest as dividends. Once the company has paid Corporation Tax on its remaining profits, you declare a dividend for whatever you want to take out.

A practical example

The figures below are an example only. They use the 2026/27 rates above and the Income Tax bands for England, Wales and Northern Ireland, and they leave out employer National Insurance on the salary.

Say your company makes a gross profit of £70,000 for the year, after all business expenses but before Corporation Tax and your salary.

You pay yourself a salary of £12,570, which brings the company’s taxable profit down to £57,430. Corporation Tax on that is about £11,469: 19% on the first £50,000, plus the 26.5% marginal rate on the remaining £7,430. That leaves about £45,961 to pay out as dividends.

Your total personal income is now about £58,531 (salary plus dividends). The salary uses your Personal Allowance, so the dividends sit in the basic and higher rate bands:

• First £500: covered by the dividend allowance at 0%.
• Next £37,200 (filling the basic rate band): taxed at 10.75% = £3,999.
• Remaining £8,261 (higher rate band): taxed at 35.75% = about £2,953.

Across the company and you personally, that’s about £18,421 in tax. A sole trader with the same £70,000 profit would pay about £18,089: £15,432 in Income Tax plus about £2,657 in Class 4 National Insurance (6% on profits from £12,570 to £50,270, then 2%).

On these figures, the Ltd route costs roughly £333 more in tax than staying a sole trader. Any employer National Insurance on your salary would add to that. Ltd company accounts also cost more than sole trader filing, often £1,000 to £2,500 a year more. So at this profit level, taking your money out as salary and dividends doesn’t save you anything. Your own numbers will be different, so check them with an accountant before you decide.

Use our tax calculator to run your own numbers and see how it compares at your income.

When dividends stop being efficient

Salary plus dividends works best when most of your dividends fall in the basic rate band. Once a large share lands in the higher rate band (35.75%), the combined rate, Corporation Tax included, can match or overtake what you’d pay as a sole trader. In the example above, it already has. At the additional rate (39.35%), the gap can grow further.

At higher incomes there are other options, such as leaving profits in the company or making pension contributions. They’re complicated, and you’ll need advice from an accountant who knows your whole financial picture.

Important rules to follow

• You can only pay dividends from accumulated profits after Corporation Tax. If the company hasn’t got enough profit, you can’t declare a dividend.
• Record each dividend with board minutes (even if you’re the only director) and a dividend voucher.
• Declare dividends formally. Moving money from your business account to your personal account without the paperwork isn’t the right way to do it.

Agree with your accountant who prepares the paperwork, and know the rules yourself so you don’t create problems by accident.

Getting the structure right

If you already run a Ltd company or you’re thinking of setting one up, you need to understand dividend tax to make the structure work for you. For the full setup, see our Ltd company guide. If you’re still deciding between sole trader and Ltd, our comparison guide sets out the pros and cons.

To model different scenarios, try our tax calculator or earnings calculator. And if you’d like a team to run chat, posting and promotion on your page while you focus on creating, find out how we work or apply to work with us.

This article is for general information only and isn’t financial advice. Tax rules and rates can change. Speak to a qualified accountant about your own circumstances.