Directors' remuneration
Directors' remuneration means every form of reward a company gives a director for their services. It is broader than salary, it is the heading used in company accounts, and it deliberately excludes dividends.
Updated 10 September 2026 · Tax year 2026/27
Directors remuneration meaning #
To define directors remuneration precisely: it is the total of everything a company gives a director in return for their services. Salary, fees, bonuses, benefits in kind, pension contributions, share awards and compensation for loss of office all sit inside it.
The term is written both ways, with and without the apostrophe. Directors remuneration and directors' remuneration mean the same thing, and the Companies Act uses the possessive form.
What counts as company director remuneration #
| Included | Not included |
|---|---|
| Salary and fees | Dividends |
| Bonuses | Loans from the company |
| Benefits in kind, such as a company car or medical cover | Repayment of genuine business expenses |
| Company pension contributions | Interest on a director loan account |
| Share options and long-term incentive awards | Rent paid for premises the director owns |
| Compensation for loss of office | |
| Payments to a third party for the director's services |
Why dividends are excluded #
This is the distinction that matters most, and it is not arbitrary. A director wears two hats in a small company.
- As an officer or employee, they are rewarded for work. That reward is remuneration.
- As a shareholder, they receive a share of profit because they own part of the company. That is a dividend.
The two are taxed differently, reported differently and governed by different rules. Salary is a deductible expense that reduces Corporation Tax. Dividends are paid out of profit that has already borne it, and can only be paid where there are distributable reserves. The split between them is a real decision.
Directors emoluments and directors remuneration #
Directors emoluments is the older term and it still appears in company accounts and in the legislation. Both words appear in the Companies Act 2006 and people use them interchangeably, but the Act distinguishes them. Remuneration is used for aggregate disclosures covering all directors together. Emoluments is used when referring to an individual director.
What has to be disclosed #
It depends entirely on the size and type of company, and this is where most confusion comes from.
| Company type | Disclosure |
|---|---|
| Quoted company | A full directors' remuneration report each year, showing what each director was paid, how the figure was determined, and how it relates to the approved remuneration policy and company performance |
| Large and medium private company | Aggregate directors' remuneration in the notes to the accounts, with further detail on pensions, long-term incentives and loss of office payments |
| Small company | Reduced requirements. Filleted accounts filed at Companies House often show nothing publicly, though the figure still exists in the full accounts |
Categories that must be disclosed where the requirement applies include remuneration for qualifying services, sums under long-term incentive schemes, company pension contributions, excess retirement benefits, compensation for loss of office, and consideration paid to a third party for a director's services.
Where it appears in the accounts #
Directors' remuneration is an expense in the profit and loss account, usually inside administrative expenses, with the detail in a note. Because it is an expense, it reduces the profit on which Corporation Tax is charged. Dividends never appear as an expense, because they are a distribution of profit rather than a cost of earning it.
A common mistake in small companies #
Money is drawn through the year and labelled as remuneration at the year end without ever going through PAYE. That does not work. A director salary is employment income and needs a PAYE scheme with real time reporting, even where no tax is due on it.
Where drawings were not run through payroll they are usually a director loan, not remuneration, and an overdrawn loan account brings its own tax charge on the company.
Common questions #
What is the meaning of directors' remuneration?
Directors' remuneration is every form of reward a company gives a director for their services. It covers salary, bonuses, benefits in kind, pension contributions, share options and compensation for loss of office. It is a broader term than salary and it is the heading used in company accounts.
Are dividends part of directors' remuneration?
No. Dividends are a return on shares, paid to shareholders because they own the company, not because they work for it. A director who is also a shareholder receives dividends in the shareholder capacity, so they sit outside remuneration.
What is the difference between remuneration and emoluments?
Under the Companies Act 2006, remuneration is used for aggregate disclosures covering all directors together, and emoluments is used when referring to an individual director. In everyday use the two are often treated as the same thing.
Does a small company have to disclose directors' remuneration?
Small companies filing abridged or filleted accounts have reduced disclosure and often do not show it publicly. Quoted companies must produce a full directors' remuneration report showing what each director was paid and how the figure was arrived at.
Related: what director salary to actually take.