Director Salary Guide UK 2026

Director Salary Guide UK

The director tier in UK businesses occupies a specific and commercially important position — senior enough to carry genuine strategic and operational accountability, but typically reporting to a C-suite leader rather than holding the top seat. Director-level compensation is shaped by the scarcity of commercially credible candidates in most functions, the increasing scope of director roles as C-suite structures are rationalised, and the ongoing tension between businesses anchoring on historical salary levels and candidates who are aware of the external market. For employers, see our CTO recruitment service.

This guide covers director salaries in the UK for the principal director-level functions, from mid-market owner-managed firms through to PE-backed platforms and listed companies. Every salary figure on this page is taken from a public source that we name and link: the Office for National Statistics’ Annual Survey of Hours and Earnings (ASHE) 2026 provisional tables for employee pay by occupation, KPMG’s Guide to Directors’ Remuneration for FTSE 100 and FTSE 250 boards, and BDO’s AIM 100 report for smaller listed companies. Where no reliable public figure exists for a role, we say so and explain what drives pay instead of inventing a range. For each function we note where sector premiums apply and identify the factors that most commonly move compensation away from the published median. Exec Capital runs director searches through its specialist team, with Adrian Lawrence FCA overseeing each mandate. Call 0203 834 9616 for a director compensation discussion.

Director Salary by Role: ONS Medians and Detailed Guides

“Director salary” covers a very wide range of jobs, so the first step is to match the role to the right data. The ONS classifies jobs using the Standard Occupational Classification (SOC 2020), and several four-digit SOC codes cover directors. The table below gives the UK full-time median for each relevant code from ASHE Table 14 (2026 provisional, released 22 October 2026), alongside our role-specific guide where one exists. Two cautions apply throughout. First, most of these SOC codes combine “managers and directors”, so the median includes senior managers below board level. Second, ASHE measures employee pay through payroll, so it does not capture dividends drawn by owner-directors.

Source for all medians in the table: ONS ASHE Table 14.7a, annual gross pay, full-time employee jobs, United Kingdom, 2026 provisional. The ONS quality measures (coefficients of variation) for codes 1133 and 1140 show these estimates are based on small samples and are less reliable, so treat them as indicative only. A median is the middle value: half of full-time employees in that code earn more, half earn less. Annual pay in ASHE includes bonuses and incentive payments paid during the year as well as basic salary, which is why it can differ from advertised base salaries.

Finance Director Salary UK

The Finance Director is the most searched director-level role in the UK executive market and the one where salary information is most frequently requested by both businesses and candidates. The FD role sits below CFO in larger organisations but at smaller businesses the Finance Director is frequently the most senior finance professional and carries equivalent accountability to a CFO at a larger firm.

The ONS code that covers the role is 1131, financial managers and directors. In the 2026 ASHE release the full-time median was £80,000, with the lower quartile at £52,043 and the upper quartile at £133,539. The mean of £138,044 sits well above the median, which tells you the distribution has a long upper tail: a minority of finance directors at larger and listed businesses earn several times the median. Because code 1131 also includes financial managers, a qualified Finance Director with board responsibility at a business of meaningful scale will usually sit in the upper half of that distribution rather than at the median. At the top of the market, KPMG’s February 2026 guide reports a median basic salary of £600,000 for FTSE 100 finance directors and £439,000 in the FTSE 250, and BDO reports £263,000 for AIM 100 CFOs.

Sector premiums are significant in Finance Director hiring. Financial services FDs typically command a premium over equivalent-sized businesses in other sectors, reflecting the regulatory complexity of the role and the FCA oversight that applies to financial reporting at regulated firms. Technology and SaaS FDs who can manage ARR, cohort analysis and SaaS-specific metrics (NRR, CAC, LTV) command similar premiums over general industry levels. Private equity-backed FDs who have led an exit process command a market premium that follows them throughout their career. If you are hiring, our finance director recruitment team can set out where your role sits against these data points.

Fractional and interim Finance Director appointments are the largest segment of the flexible executive market. Fractional FD engagements at growing businesses are priced on a day rate for an agreed number of days a week or month, and interim FD day rates vary with business complexity and urgency; the section on interim and fractional pay below explains how these arrangements are structured. FD Capital, the sister brand to Exec Capital, specialises specifically in Finance Director and fractional CFO placement across the UK.

Marketing Director Salary UK

The Marketing Director is one of the most searched director-level roles in the UK and reflects the continued premium on commercially credible marketing leadership across both consumer and B2B businesses.

The ONS groups marketing, sales and advertising directors together under code 1132. That group had a full-time median of £96,393 in April 2026, a lower quartile of £68,288 and an upper quartile of £140,018. Unlike many of the other director codes, 1132 contains the word “directors” without “managers”, which partly explains why its median is higher than the finance and HR codes. Within the group the range is wide and reflects significant variation in the scope of the role — a Marketing Director at a £5m DTC consumer brand commands different compensation from a Marketing Director at a £40m B2B technology business despite a similar title. At larger businesses, bonus structures tied to lead generation, brand metrics or revenue attribution make up a bigger share of the package.

The most significant driver of Marketing Director pay beyond title and business size is the specific channel expertise demanded. Performance marketing directors with proven track records in paid acquisition at scale command substantial premiums over brand-focused candidates; brand directors at businesses where brand equity is a core commercial asset command equivalently. Candidates who can demonstrate marketing attribution — genuine commercial proof of their contribution to revenue — command a consistent premium over candidates who cannot. Our marketing director recruitment page explains how we assess that evidence during a search.

Sales Director Salary UK

Sales Director compensation has the highest proportion of variable elements of any director-level role, reflecting the direct commercial accountability of the function. Base salary is frequently a less meaningful reference point for Sales Directors than for other roles — a Sales Director with a modest base but an uncapped commission structure on a high-value enterprise product can earn substantially more than a peer with a higher base in a less commercially productive role.

Sales directors fall in the same ONS code as marketing directors (1132, full-time median £96,393). ASHE annual pay includes incentive payments received in the year, so commission and bonus are partly reflected in that figure; ONS also publishes incentive pay separately in Table 14.8 for those who want to look at the variable element on its own. On-target earnings (OTE) are set as base plus expected commission at plan, and the gap between base and OTE is where sales director packages differ most from other director roles. For a role-by-role breakdown, including how OTE structures are usually built, see our dedicated sales director salary guide linked in the table above.

The most important distinction in Sales Director hiring is between new business-focused candidates (hunters) and account management and revenue retention-focused candidates (farmers). These profiles attract candidates from different talent pools, with different career trajectories and different compensation expectations, and conflating them in a brief is one of the most common causes of a failed Sales Director search. New business-focused Sales Directors typically command higher OTE structures with larger variable components; account management and retention-focused Sales Directors typically command more balanced base-to-variable ratios reflecting the more predictable revenue flow they manage.

Operations Director Salary UK

Operations Director compensation reflects the breadth of the function, which varies more significantly by industry than any other director-level role. An Operations Director at a manufacturing business is managing supply chain, production, quality and logistics. An Operations Director at a professional services firm is managing service delivery, resourcing and process excellence. An Operations Director at a financial services business may be managing client onboarding, settlements, regulatory reporting and operational risk. These contexts attract different candidates and command different compensation. For employers, see our COO recruitment service.

There is no single ONS code for an Operations Director, so the right comparison depends on the business. In manufacturing, the nearest code is 1121, production managers and directors in manufacturing, with a full-time median of £59,695 and an upper quartile of £87,192; in construction, code 1122 had a median of £59,994. Operations directors in service businesses are more likely to be classified under 1139, functional managers and directors not elsewhere classified, where the median was £84,439 and the upper quartile £119,577. In logistics, the small-sample code 1140 for directors in logistics, warehousing and transport reported a median of £95,898, which ONS marks as less reliable. At PE-backed businesses where operational improvement is central to the value creation plan, bonus and equity typically carry more weight in the package.

Operations Directors with specific transformation experience — having led a major ERP implementation, restructured a supply chain, or managed a significant regulatory-driven operational change programme — command a consistent premium over standard market rates. This experience premium reflects the genuine scarcity of candidates who have led complex operational change programmes successfully and the high value that businesses undergoing equivalent programmes place on proven track record. For a hire of this kind, see our operations director recruitment service.

HR Director Salary UK

Human Resources Director compensation has been supported by the increasing strategic weight placed on people function leadership at UK businesses — a function that was historically treated as primarily administrative is now, at many businesses, central to the commercial strategy through talent acquisition, retention and culture. The latest ONS data is consistent with that: the full-time median for human resource managers and directors (code 1136) rose 6.4% in the year to April 2026, against 4.5% for all full-time employees.

The 2026 full-time median for code 1136 was £61,445, with a lower quartile of £46,053, an upper quartile of £86,079 and a 90th percentile of £116,689. As with finance, this code combines HR managers and HR directors, so an HR Director with a seat on the executive committee will usually be paid in the upper part of the distribution. The upper end of the market reflects HR Director roles at businesses with complex employment landscapes — multi-site operations, regulated environments requiring specific people compliance expertise, or businesses undergoing significant transformation. At PE-backed businesses where people retention is directly tied to equity value, bonus and LTIP or MIP participation can add materially to the package.

The premium for HR Directors with specific TUPE, M&A integration or restructuring experience is consistent and material. Businesses undergoing significant corporate transactions — acquisitions, carve-outs, restructurings — regularly pay above the standard HR Director rate to secure candidates with proven M&A people leadership experience, given the commercial consequences of poor people management during transactions.

IT Director Salary UK

IT Director compensation sits at a crossroads between technology leadership and operational management — and the specific balance between these two dimensions is the primary driver of compensation variation within the role. An IT Director who is primarily managing infrastructure, helpdesk and vendor relationships commands different compensation from an IT Director who is leading digital transformation and managing significant technology investment decisions at board level.

IT directors have their own ONS code, 1137 information technology directors, which separates them from IT managers (code 2132). The 2026 full-time median for IT directors was £98,127, the highest of the director codes in this guide, with a lower quartile of £73,235 and an upper quartile of £138,192. For comparison, IT managers had a full-time median of £58,086, which illustrates how much the director title and its accountability are worth in this function. The upper end reflects roles that carry strategic technology governance accountability rather than primarily operational IT management, and businesses in technology-intensive sectors such as financial services, logistics and retail tend to pay towards it. Our IT director recruitment team handles both profiles.

The emergence of AI governance as a board-level concern has created a specific premium for IT Directors who can bridge IT infrastructure management and AI governance — understanding the systems implications of AI deployment, the data infrastructure requirements and the operational risk management considerations. This is currently a genuinely scarce combination and commands a premium that is likely to persist.

Legal Director Salary UK

Legal Director appointments cover a range from in-house legal counsel at director level through to General Counsel with the Legal Director title at mid-market businesses. At businesses where the Legal Director is the most senior in-house legal professional, compensation reflects both the legal expertise and the governance accountability of the role.

The ONS does not publish a separate director-level code for in-house lawyers; legal directors are generally classified alongside other legal professionals, so ASHE does not give a clean median for the role. What drives pay is clearer. Compensation reflects the typically senior legal expertise required at businesses that have concluded a dedicated in-house legal hire is warranted, rises at businesses with complex legal environments — financial services, pharmaceuticals, listed companies — and is highest at major corporations where the Legal Director is effectively a General Counsel with broad risk and governance accountability. At listed companies where the General Counsel sits on the executive committee but not the board, their pay is not disclosed in the directors’ remuneration report, so public data is thin.

Financial services Legal Directors who combine legal expertise with FCA regulatory knowledge command a significant premium over general industry legal pay. The intersection of legal and regulatory expertise is a limited talent pool, and businesses looking for a Legal Director who can handle both commercial legal matters and FCA regulatory requirements simultaneously will consistently find the market narrower and more expensive than they expect.

Commercial Director Salary UK

The Commercial Director title covers a range of functions depending on the business — from a commercially focused general manager who combines revenue generation and operational delivery, to a strategic partnership and business development leader, to a senior sales and marketing leader at a B2B business. This variation means that Commercial Director pay requires more contextual qualification than most other director roles.

Where the role is primarily sales and marketing leadership, the closest ONS comparison is code 1132 (full-time median £96,393); where it is closer to general management, code 1111 (£95,516) or 1139 (£84,439) may be a better reference. Variable elements are usually a larger share of the package than for support functions, reflecting the direct commercial accountability most Commercial Director roles carry, and equity participation is common at PE-backed businesses. The Commercial Director at a PE-backed business where revenue growth is the primary equity value driver is frequently one of the most highly compensated director-level roles in the business, given the direct connection between their performance and investment returns.

Technology Director Salary UK

The Technology Director role typically sits below CTO in larger organisations and focuses on technology delivery and management rather than technology strategy. At mid-market businesses where there is no separate CTO, the Technology Director may carry the full scope of the technology leadership function.

Technology directors are classified with IT directors under ONS code 1137, so the same figures apply: a full-time median of £98,127 and an upper quartile of £138,192 in April 2026. The ONS also publishes regional figures for the code, and London IT directors had a full-time median of £121,997. Pay rises at technology-intensive businesses and those undergoing digital transformation. In financial services, where technology risk and operational resilience are governance priorities, Technology Directors command a premium over equivalent roles in other sectors, reflecting the regulatory context and the specific technology risk management capabilities required.

Managing Director Salary UK

The Managing Director title in the UK spans the full range from sole executive of an SME to divisional MD within a FTSE 100 group. This structural variation makes MD compensation the most difficult director-level role to pin down without specific context.

Managing directors are classified with chief executives under ONS code 1111, chief executives and senior officials. The 2026 full-time median was £95,516, with a lower quartile of £54,046 and an upper quartile of £163,111, and in London the median was £135,068. The mean of £174,391 is far above the median, again reflecting a small number of very highly paid chief executives. At standalone businesses where the MD is the most senior executive, compensation tracks CEO pay at a business of the same size, with variable elements and equity participation at PE-backed businesses. Divisional MDs within larger groups typically earn less than a group CEO, reflecting the narrower scope, with bonus structures tied to divisional performance. PE-backed portfolio company MDs are a particularly active market in the UK, where MIP equity can represent multiples of base salary over a successful hold period. The MD recruitment page covers how we approach these searches.

Product, Engineering and Procurement Director Salaries UK

The Director of Product, Engineering Director and Procurement Director represent three important director-level functions that have grown in commercial prominence over the past five years and whose compensation has moved accordingly.

Director of Product roles at UK technology and SaaS businesses are not separately identified in ASHE; they are usually coded with other functional or IT roles. Pay rises from scale-up stage to larger product-led businesses and enterprise software companies. The premium for product directors with a demonstrable track record of product-market fit — having taken a product through successful commercial launch and sustained growth — is consistent and material, reflecting the rarity of proven commercial product leadership versus theoretical product management capability.

Engineering Directors at UK technology businesses are likewise not identified as a separate ONS code; depending on the business they may be classified with IT directors (1137) or with engineering professionals. At financial services businesses where technology engineering capability is a direct commercial differentiator — fintech, algorithmic trading, digital wealth platforms — engineering leadership commands a premium. The specific premium for Engineering Directors with AI/ML engineering capability at scale remains one of the most significant in the UK technology market.

Procurement Directors map to ONS code 1134, purchasing managers and directors, which had a full-time median of £59,192, a lower quartile of £43,778 and an upper quartile of £81,398 in April 2026. Because the code includes purchasing managers, a Procurement Director responsible for a large spend budget will typically sit towards the top of that range or above it, with the range reflecting the direct bottom-line impact of procurement performance. At businesses where supply chain resilience has become a board-level priority — following the disruptions of 2020–2023 — Procurement Directors with resilience and supplier diversification track records command consistent premiums. See our procurement director recruitment page for how we approach these hires.

Director Salary Quick Reference

The following table summarises the spread of full-time pay for each director-level ONS code, so you can see not only the median but where the middle half of earners sits. All figures are UK gross annual pay for full-time employee jobs in April 2026, from ONS ASHE Table 14.7a (2026 provisional). Smaller businesses will tend towards the lower quartile; larger and sector-specific businesses towards the upper quartile or above.

These are total annual gross pay figures for employees, not base salary alone, and they include bonus and incentive payments received during the year. They do not include employer pension contributions, the value of share awards, or dividends paid to owner-directors. Where the mean sits well above the median — most clearly for chief executives and finance directors — a small number of very high earners is pulling the average up, and the median is the better guide to a typical salary. ONS publishes these tables as provisional and revises them a year later, so small movements should not be over-read. For a specific market rate discussion on any director-level role, call 0203 834 9616 or visit our executive salary guide for C-suite pay; the SMF salary guide in the role table above covers regulated firm compensation. Significant regional, sector and seniority variations exist within each range — the figures above should be treated as directional indicators rather than precise market rates for a specific role at a specific business.

Listed Company Director Pay: FTSE and AIM

Executive directors of listed companies are the one group whose individual pay is published, because quoted companies must disclose it in the directors’ remuneration report. That makes listed-company pay the most transparent part of the market, and also the least typical: these are the largest businesses in the country and the packages are an order of magnitude above the ONS medians.

KPMG’s Guide to Directors’ Remuneration (February 2026), which covers companies with financial year ends up to 31 March 2025, reports the following medians:

The same KPMG guide shows how much of the package is variable at this level. The median maximum annual bonus in the FTSE 100 is 200% of salary for chief executives and finance directors, and the median bonus actually paid was 149% of salary for chief executives and 137% for finance directors. In the FTSE 250 the median maximum bonus is 150% of salary, with 111% paid to chief executives and 104% to finance directors. Median pension contributions were 10% of salary in the FTSE 100 and 8% in the FTSE 250, and median salary increases were 3% for chief executives and finance directors in both indices. Shareholding requirements are substantial too: the median FTSE 100 chief executive must build and hold shares worth 400% of salary.

For smaller quoted companies, BDO’s AIM 100 Directors’ Remuneration Report (March 2025, covering 2024) gives a median CEO salary of £366,000 with median total remuneration of £755,000, a median CFO salary of £263,000, a median salary of £243,000 for other executive directors and a median non-executive base fee of £58,000. These figures give a better reference point than the FTSE indices for growth businesses approaching or recently through a listing. Non-executive pay is a separate subject, covered in our guide to non-executive director fees in the UK.

Company Director Salary in an Owner-Managed Company: Salary vs Dividends

A large share of searches for “company director salary” come from people who own and run their own limited company, not from employers hiring a director. For an owner-director the question is different: not “what is the market rate?” but “how should I take money out of my company?” This section explains how the mechanics work using the published 2026/27 rates. It is general information, not tax advice; the right answer depends on your company’s profits, your other income, where you live and your plans, and you should take advice from your accountant before deciding.

The two main routes: salary and dividends

A director who is also a shareholder can be paid in two main ways. A salary is paid through payroll, so the company must register as an employer and deduct income tax and National Insurance, and it pays employer National Insurance on top; in return, salary and employer National Insurance are deductible when working out the company’s corporation tax. A dividend is a distribution of profit to shareholders: gov.uk explains that dividends cannot be counted as a business cost for corporation tax, can only be paid out of available profits from current and previous years, and must usually be paid to all shareholders in proportion to their shares, with a directors’ meeting and paperwork for each one. Dividends carry no National Insurance, but they are paid out of profits that have already borne corporation tax.

The 2026/27 numbers that matter

• Personal allowance: £12,570, reduced by £1 for every £2 of income over £100,000 (HMRC rates and thresholds for employers 2026 to 2027).
• National Insurance thresholds: lower earnings limit £6,708 a year; primary threshold (where employee National Insurance starts) £12,570; secondary threshold (where employer National Insurance starts) £5,000. Employee National Insurance is 8% between the primary threshold and the upper earnings limit and 2% above; employer National Insurance is 15% above the secondary threshold.
• Employment Allowance: up to £10,500 off the employer National Insurance bill, but gov.uk is clear that a company with only one director cannot claim it if that director is the only employee liable for employer National Insurance.
• Dividend allowance and rates: the first £500 of dividends is tax-free; above that, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band for 2026/27. The basic and higher dividend rates rose by two percentage points from 6 April 2026.
• Corporation tax: 19% small profits rate on profits up to £50,000, 25% main rate above £250,000, with marginal relief in between; the thresholds are reduced if the company has associated companies (gov.uk corporation tax rates).

The Budget on 28 October 2026 did not change these for owner-directors in the near term. The Budget 2026 rates and allowances annex shows the dividend ordinary, upper and additional rates staying at 10.75%, 35.75% and 39.35% for 2027/28, the £500 dividend allowance continuing, the secondary threshold staying at £96 a week (£5,000 a year), employer National Insurance staying at 15%, the Employment Allowance remaining £10,500 and corporation tax rates unchanged. The changes it did make to unearned income were to savings and property income rates from April 2027, which do not affect dividends.

Common salary levels for an owner-director

Because the thresholds sit at different points, owner-directors and their accountants typically look at three salary levels. The arithmetic below uses the 2026/27 thresholds above for a director with no other income, living in England, in a company that cannot claim the Employment Allowance.

• £5,000 (the secondary threshold): no employer or employee National Insurance and no income tax. But it is below the lower earnings limit of £6,708, so the year does not count towards the director’s State Pension record through this salary.
• £6,708 (the lower earnings limit): the year counts towards the State Pension without any employee National Insurance being paid. Employer National Insurance is 15% of the £1,708 above the secondary threshold, which is £256.20.
• £12,570 (the personal allowance and primary threshold): no income tax and no employee National Insurance, but employer National Insurance of 15% on £7,570, which is £1,135.50. Where the company can claim the Employment Allowance, that cost is usually covered.

The salary and the employer National Insurance on it reduce the company’s taxable profit, so part of the cost comes back through lower corporation tax. Working through the figures at the 19% small profits rate, the extra £5,862 of salary needed to move from £6,708 to £12,570 costs the company £879.30 in employer National Insurance but saves £1,280.85 of corporation tax; the same pre-tax money paid as a dividend instead would leave the director with about £400 less. That is why many advisers favour a salary at or near the personal allowance even when the Employment Allowance is not available — but the conclusion can change if the company is loss-making, if the director has other income using up the personal allowance, or if student loan or pension considerations apply. It is a calculation to run with your accountant, not a rule.

How dividends sit on top of the salary

Dividends are treated as the top slice of income. Using the gov.uk method, a director taking a £12,570 salary and £37,700 of dividends in 2026/27 would have total income of £50,270, the top of the basic rate band. The salary uses the personal allowance, the first £500 of dividends is covered by the dividend allowance, and the remaining £37,200 is taxed at 10.75%, giving personal tax of £3,999 and no National Insurance. That is not the whole picture, though: if the company pays corporation tax at 19%, it needs roughly £46,543 of pre-tax profit to fund a £37,700 dividend, so about £8,843 of corporation tax has already been paid on that money. At the 25% main rate the corporation tax cost is higher. Once income moves into the higher rate band, dividends are taxed at 35.75%, and the comparison between salary and dividends narrows further.

Other points owner-directors often miss

• Minimum wage: gov.uk lists company directors among those not entitled to the National Minimum Wage, which is why a low director salary is lawful. A director who also has a contract of employment may be in a different position, so check if that applies.
• Distributable profits: a dividend paid without sufficient available profits can be unlawful and may have to be repaid. Interim management accounts should support every dividend.
• Other shareholders: dividends go to all shareholders of the same class, so a dividend-heavy strategy works differently where there are outside investors.
• Employer pension contributions: these are a third route that many owner-directors use alongside salary and dividends, subject to the annual allowance and the “wholly and exclusively” test.
• Scotland: Scottish taxpayers have different income tax bands on salary, so the salary side of the calculation differs.

This is also why ONS medians for small-company directors can look low. ASHE records only the PAYE salary, so an owner-director paying themselves £12,570 and drawing the rest as dividends appears in the data as a low earner. When a growing owner-managed company appoints its first external director, the comparison is with the employee market in the tables above, not with what the founder draws.

Director Salaries in London vs the Regions

Location remains one of the biggest single influences on director pay. The ONS publishes ASHE by workplace region and occupation in Table 15, which lets us compare the main director codes across the UK. The table shows full-time median annual pay for April 2026; “n/p” means the ONS did not publish a median because the sample was too small to be reliable.

Three points stand out. First, the London premium is largest for finance and general management: the London median for financial managers and directors is around half as much again as the UK figure, and London chief executives sit roughly 40% above the UK median. That reflects the concentration of head offices, financial services and listed companies in the capital as much as living costs. Second, the premium is smaller for marketing, sales and HR directors, at roughly a fifth above the UK median in each case, and for marketing and sales directors the South East and Scotland are at or slightly above the UK figure. Third, the published regional samples are small, so treat single-region figures as indicative and use them alongside the UK quartiles rather than in isolation. The North East, East Midlands and Wales have too few observations in most of these codes for the ONS to publish medians. Remote and hybrid working has narrowed the gap for some roles, particularly where a London business is willing to hire a director who attends in person only part of the week, but it has not removed it.

How a Director Remuneration Package Is Put Together

Base salary is the headline, but at director level it is rarely the whole offer, and candidates compare the whole package. A typical director package in the UK combines some or all of the following elements.

• Base salary. The fixed element, usually reviewed annually. It also drives other parts of the package, because bonus, pension and LTIP awards are commonly expressed as a percentage of salary.
• Annual bonus. Paid against a mix of financial targets (revenue, EBITDA, cash) and personal or strategic objectives. Listed companies publish their maximum bonus opportunity; in the KPMG data the FTSE 100 median maximum is 200% of salary. Private companies usually set lower maxima and more discretion.
• Commission or OTE. For sales-led roles, a commission plan replaces or supplements the bonus. The offer should be clear about whether commission is capped, how accelerators work above target and when commission is earned and paid.
• Long-term incentives. At listed companies, performance share plans or restricted share plans. At PE-backed companies, a Management Incentive Plan (MIP) or sweet equity that pays out on exit. At founder-led businesses, EMI options are common where the company qualifies.
• Pension. Employer contributions are a meaningful part of the cost. KPMG reports median contributions of 10% of salary for FTSE 100 executive directors and 8% in the FTSE 250, and many listed companies have aligned director pension rates with the wider workforce.
• Benefits. Private medical cover, life assurance, income protection, car or car allowance, and directors’ and officers’ liability insurance. D&O cover is often overlooked in offer negotiations but matters to candidates taking statutory director roles.
• Notice period and restrictive covenants. These do not show up in salary data but affect what a candidate will accept and what it costs to hire them, as the FAQ below explains.

The balance between these elements varies by ownership. Owner-managed businesses tend to weight the package towards base salary and a discretionary bonus. PE-backed businesses keep base salary close to market and put more of the reward into equity that pays out on a successful exit; the private equity executive search page explains how those packages are typically negotiated. Listed companies operate under a shareholder-approved remuneration policy, which limits how far an individual offer can depart from the published framework. When comparing an offer against the ONS figures in this guide, remember that ASHE annual pay includes salary and bonus paid through payroll in the year, but not pension contributions, share awards or the value of benefits.

Interim and Fractional Director Day Rates: How They Are Structured

Not every director appointment is permanent. Interim directors are engaged full-time for a defined period, usually to cover a gap, lead a transformation or steady a business through a transaction. Fractional directors work part-time on an ongoing basis, for example one or two days a week. There is no official dataset for interim or fractional director pay comparable to ASHE, so rather than quote unverifiable ranges, this section explains how the pricing works.

Day rates, not salaries

Interim and fractional directors are almost always paid a day rate. To compare a day rate with a salary, the business needs to compare like with like: an employed director costs salary plus employer National Insurance at 15% above the secondary threshold, pension contributions, benefits, holiday pay, and the cost of recruitment and notice. An interim or fractional director invoices only for the days worked and covers their own holiday, pension and gaps between assignments. A day rate that looks high when multiplied by a full working year is often comparable once those costs are included, and for a fractional director working one or two days a week the total annual cost is a fraction of a full-time salary.

What moves the rate

• Function and accountability: finance, transformation and regulated roles tend to price highest because the consequences of getting them wrong are greatest.
• Urgency: a director needed to start next week, often because of a sudden departure or a lender deadline, costs more than one appointed with notice.
• Complexity: refinancing, insolvency risk, a sale process or an FCA authorisation all narrow the pool of credible candidates.
• Commitment: a fractional director on a long-term, predictable retainer may accept a lower day rate than an interim on a short assignment.
• Regulatory responsibility: where the interim or fractional director will hold a Senior Manager Function at an FCA-regulated firm, the personal regulatory accountability is reflected in the rate. Fractional SMF16 and SMF17 compliance and MLRO roles are among the most common fractional appointments we see.

How the engagement is contracted

Most interim and fractional directors work through their own limited company, either contracting directly with the client or through a search firm. Where the client is a medium or large business, the off-payroll working rules (IR35) require the client to decide whether the engagement would be employment if the director were engaged directly, and if it is inside the rules, tax and National Insurance are deducted at source. Senior interim roles with real day-to-day control of a business, or a statutory directorship, need careful assessment. When a search firm supplies the director, the client usually pays a single day rate that includes the firm’s margin, rather than a placement fee. Our interim executive recruitment and fractional C-suite services explain how we structure these appointments.

Compensation and Package Structure: What Drives Director Pay Above the Median

Across all director-level roles, the same structural factors that drive C-suite compensation above the market median apply — scarcity of specific capability, speed of requirement, retention risk and PE equity economics. At director level, several additional factors are particularly significant.

Interim and fractional director arrangements are a growing feature of the UK director market and have their own compensation logic, set out in the section above. Interim day rates vary with seniority and function, with Finance Directors and Sales Directors usually at the upper end of the market, reflecting the direct commercial accountability of both roles. Fractional director arrangements — where the individual works one to three days per week — are priced to reflect the flexibility and the self-employment overhead that fractional directors carry. Businesses that compare fractional director costs to full-time employment costs on a simple day-rate basis frequently undervalue the arrangement — the flexibility to scale time up or down, the absence of employer on-costs and the ability to access a more senior candidate than the full-time budget would support are all material benefits that the day-rate comparison does not capture.

Board-level director versus operational director — at listed companies and larger PE-backed businesses, some director-level roles have board representation and others do not. A Finance Director who attends board meetings and is a formal board member carries different accountability and commands different compensation from a Finance Director who manages the day-to-day finance function and reports upward through a CFO. Getting this distinction right at the point of brief, and ensuring the compensation package reflects the actual accountability level, is one of the most common areas where businesses and candidates reach different assumptions during the negotiation process. Statutory directors also take on legal duties under the Companies Act, which candidates reasonably expect to be reflected in pay and in D&O cover. Our board of directors recruitment work deals with this distinction on most mandates.

Sector migration premium — directors who have moved from high-compensation sectors (financial services, consulting, technology) into other industries typically anchor their expectations to their sector of origin. A Finance Director who has spent ten years at a tier-one investment bank and is considering a move to a manufacturing business will expect compensation that reflects their previous sector, not the target sector median. Businesses that insist on matching only their own sector’s pay will consistently lose this candidate to alternatives that are willing to pay a sector migration premium.

Promotion readiness — directors who are genuine C-suite succession candidates command a premium over peers who are not on the C-suite track. Businesses that can credibly offer a director a clear path to CFO, COO or CEO within a defined timeframe are offering total compensation that includes the future career value of the appointment, which justifies a lower current cash package. Businesses that cannot make this offer credibly need to compensate for the absence of career trajectory through cash.

Position in the distribution — the ONS quartiles in this guide are a useful way to decide where an offer should land. A director role at a small, simple business with a narrow brief can reasonably be pitched near the median for its code. A role with board membership, a complex or regulated environment, or a transaction on the horizon belongs in the upper quartile or above. Pitching a demanding role at the median is the most common reason a director search stalls, because the candidates who meet the brief are already earning more than the offer.

Where These Figures Come From

Salary guides often quote ranges without saying where they came from. We have taken a different approach, so it is worth being clear about what each source measures and its limits.

• ONS ASHE 2026 provisional. A survey of employee jobs drawn from HMRC PAYE records, with pay measured for April 2026 and annual pay for the year to April 2026. It is the most authoritative source on UK employee pay by occupation. Its limits for director pay are that SOC codes often combine managers and directors, that owner-directors’ dividends are not counted, and that small samples mean some regional figures are suppressed. Provisional figures are revised the following year.
• KPMG Guide to Directors’ Remuneration. Built from published remuneration reports of FTSE 100 and FTSE 250 companies. It is precise for listed executive directors and not representative of private companies.
• BDO AIM 100 Directors’ Remuneration Report. The same approach applied to the largest companies on AIM, which is a better reference for smaller quoted and pre-IPO businesses.
• HMRC and gov.uk. Tax rates, thresholds and allowances for the owner-director section, including the Budget 2026 rates annex for 2027/28.

What none of these sources gives is a reliable picture of private-company director pay by business size, or of interim and fractional day rates. That is where a conversation with a search firm that is active in the market adds something the data cannot. For a view on a specific role, our executive search team can talk through what current searches are showing.

Frequently Asked Questions

How much does a company director earn in the UK?

It depends heavily on the function and the size of the business. ONS ASHE 2026 puts the full-time median at £95,516 for chief executives and senior officials, £98,127 for IT directors, £96,393 for marketing, sales and advertising directors, £80,000 for financial managers and directors and £61,445 for HR managers and directors. Executive directors of FTSE 100 companies earn far more, with KPMG reporting a median chief executive base salary of £971,000.

What is the difference between a Director and a C-suite executive in terms of compensation structure?

Director-level roles typically carry smaller variable compensation components than C-suite roles, reflecting the narrower accountability scope of the function relative to the whole business. Bonus opportunity is usually a lower percentage of salary for a functional director than for the CEO or CFO, and director-level equity participation at PE-backed businesses is typically smaller than C-suite participation — though this varies significantly by business and the relative seniority of the director role within the specific organisation. In listed companies the gap is visible in the KPMG data: FTSE 250 chief executives had median total earnings of £1,815,000 against £1,155,000 for finance directors.

Are director salaries higher in London than elsewhere?

Yes. ONS ASHE 2026 shows a full-time median of £121,504 for financial managers and directors working in London against £80,000 across the UK, and £135,068 for London chief executives against £95,516 nationally. The premium is smaller for marketing, sales and HR directors. It reflects the concentration of high-value employers and the more competitive talent market, and it compresses for roles that are genuinely remote-capable, where the London talent market competes directly with regional candidates.

What salary should the director of a small limited company pay themselves?

There is no single right answer and you should take advice, but for 2026/27 the levels most often considered are £5,000 (the employer National Insurance threshold), £6,708 (the lower earnings limit, which protects the State Pension record) and £12,570 (the personal allowance and employee National Insurance threshold), with further income taken as dividends. The section on owner-managed companies above explains the trade-offs.

How are dividends taxed for company directors in 2026/27?

The first £500 of dividends is tax-free. Above that, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. Budget 2026 kept these rates and the £500 allowance for 2027/28. Dividends are paid from profits that have already borne corporation tax.

How should we approach a director salary review if we think the individual is being paid below market?

Address it proactively and before the individual raises it. Directors who discover they are significantly below market through an external approach or a peer conversation rarely remain passive — the most likely outcomes are either a difficult retention conversation or a departure. An annual review against published data such as the ONS quartiles, which identifies and corrects material below-market positions before they become retention issues, is substantially less costly than the recruitment and transition costs of losing a director who has decided to look externally.

Is it standard to include equity participation for director-level hires at PE-backed businesses?

Yes — equity participation through a Management Incentive Plan is standard practice at PE-backed businesses for director-level roles and above at portfolio companies. The specific MIP structure varies by business and fund, but the expectation that a director-level hire at a PE-backed company will have equity skin in the game is near-universal in the UK mid-market PE landscape. Directors who join PE-backed businesses without equity participation have a materially weaker alignment of interests with the investment thesis and are typically less engaged in the outcome. PE funds that do not offer MIP to director-level executives consistently struggle to attract the quality of talent that delivers the operational improvement the investment thesis requires.

How does notice period length affect director hiring?

Three months is common for UK director-level roles, and six months is increasingly common at more senior director positions. Notice period length is an underappreciated factor in director hiring timelines — a business that needs a Finance Director in post within eight weeks cannot recruit a candidate who is subject to a three-month notice period without either accepting a delayed start or offering to buy out the notice period. Buyout of notice period at director level is common where the speed of appointment has material commercial value; the cost is broadly the pay and benefits the candidate would forgo for the period bought out, and an interim appointment is often the cheaper way to cover the gap.

When does a director role become a C-suite appointment?

The distinction between a senior director and a C-suite executive is primarily one of accountability scope and board relationship. A Finance Director who reports to a CFO and manages the day-to-day finance function is a director role. A Finance Director who reports directly to the CEO, attends board meetings and has responsibility for the firm’s financial strategy and external reporting is effectively a CFO regardless of the title. Getting the title right matters for compensation — candidates who are carrying C-suite accountability at a director salary are the most susceptible to external approaches, because the external market will recognise and compensate the level of accountability they are actually carrying.

Do company directors have to be paid the National Minimum Wage?

Gov.uk lists company directors among the groups not entitled to the National Minimum Wage or National Living Wage, which is why an owner-director can lawfully take a low salary. A director who also has a contract of employment with the company should check their position, because the employment relationship can change the answer.

Why are ONS director salaries lower than I expected?

Three reasons. Most director SOC codes also include managers, which pulls the median down. ASHE records PAYE pay only, so owner-directors who take most of their income as dividends appear as low earners. And the median is the middle of a very wide distribution: for chief executives the 2026 mean of £174,391 is more than 80% above the median, because a small number of very highly paid directors sit at the top. For a senior hire at a business of real scale, the upper quartile is usually the better reference point.