Dividend Tax Calculator
Work out the tax on your dividends for 2026/27, including your salary and other income, with the new rates from April 2026 and every step shown.
- 10.75%basic rate
- 35.75%higher rate
- £500tax-free allowance
- Dividends after tax
- £33,701.00
- Tax on the next £1 of dividends
- 35.75%
- Personal allowance
- £12,570.00
- Tax on salary and other income
- £0.00
- Tax on savings
- £0.00
- Total income tax
- £3,999.00
- Compared with 2025/26
- + £744.00
- How to pay
- Self Assessment
- Pay HMRC by
- 31 Jan 2028
Tested against HMRC's worked example · Rates checked 3 November 2026 · Not affiliated with HMRC · How we calculate
Your tax rate on dividends
The share of your dividends paid in tax as they grow, with your other income fixed and your figures marked.
- Effective rate on dividends
- Your dividends
Enter your dividends and your salary or other income, and this UK dividend tax calculator shows what you owe for 2026/27, how much of your dividends you keep, and how each pound was taxed. It works as a simple dividend calculator for shareholders and as a full income and dividend tax calculator for company directors, with savings interest, the £100,000 personal allowance taper and Scottish taxpayers covered too.
Dividend tax rates 2026/27
Dividend tax went up on 6 April 2026. The basic and higher rates each rose by 2 percentage points, while the additional rate and the £500 dividend allowance stayed the same.
| Tax band | Income | 2026/27 | 2025/26 |
|---|---|---|---|
| Dividend allowance | First £500 of dividends | 0% | 0% |
| Basic rate | Up to £50,270 | 10.75% | 8.75% |
| Higher rate | £50,271 to £125,140 | 35.75% | 33.75% |
| Additional rate | Over £125,140 | 39.35% | 39.35% |
Income ranges assume the standard £12,570 personal allowance. Your salary and other income fill the bands first, and dividends sit on top.
How much tax on dividends will you pay?
It depends on your other income as much as on your dividends. Two allowances come off first: whatever is left of your £12,570 personal allowance after your salary, and the £500 dividend allowance. The rest is taxed at the rate for the band each pound lands in.
HMRC's own example: someone earning £29,570 in wages with £3,000 of dividends. The first £500 is tax-free and the remaining £2,500 is taxed at 10.75%, so the dividend tax is £268.75. In 2025/26 the same dividends would have cost £218.75.
A company director on the common £12,570 salary can take £37,700 of dividends and stay in the basic rate band. That costs £3,999 in 2026/27, up £744 on last year.
How dividend tax is calculated
Every dividend income tax calculator, this one included, follows the same three steps. The calculator above shows them with your own figures.
- 1
Take off your personal allowance
The £12,570 personal allowance is used against salary and other income first. Anything left over covers dividends. It shrinks by £1 for every £2 of income above £100,000.
- 2
Take off the dividend allowance
The next £500 of dividends is taxed at 0%. It still counts towards your bands, so it can push later dividends into a higher one.
- 3
Tax the rest by band
Dividends in the basic rate band pay 10.75%, in the higher rate band 35.75%, and above £125,140 39.35%. Add the bands together for your dividend tax.
Dividend tax on common amounts (2026/27)
| Dividends | Tax 2026/27 | Effective rate | Tax 2025/26 | Increase |
|---|---|---|---|---|
| £1,000 | £53.75 | 5.38% | £43.75 | + £10 |
| £5,000 | £483.75 | 9.68% | £393.75 | + £90 |
| £10,000 | £1,021.25 | 10.21% | £831.25 | + £190 |
| £20,000 | £2,096.25 | 10.48% | £1,706.25 | + £390 |
| £30,000 | £3,171.25 | 10.57% | £2,581.25 | + £590 |
| £37,700 | £3,999 | 10.61% | £3,255 | + £744 |
| £50,000 | £8,396.25 | 16.79% | £7,406.25 | + £990 |
| £75,000 | £17,333.75 | 23.11% | £15,843.75 | + £1,490 |
| £100,000 | £27,842.49 | 27.84% | £25,852.49 | + £1,990 |
| £150,000 | £48,636.22 | 32.42% | £46,394.82 | + £2,241.40 |
With a £12,570 salary that uses the personal allowance, no savings interest, and a taxpayer outside Scotland. For anything else, use the calculator at the top of the page.
Dividend tax worked examples
Real situations, each worked out by the calculator above for 2026/27.
Director, basic rate · Oakridge Studio Ltd
£12,570 salary and £37,700 of dividends
The salary uses the whole personal allowance, so none of the dividends are covered by it. The first £500 is tax-free and the other £37,200 is taxed at 10.75%: £3,999. The director keeps £33,701 of the dividends.
Director, higher rate · Vale Engineering Ltd
£12,570 salary and £60,000 of dividends
£37,200 of the dividends fall in the basic rate band at 10.75% and £22,300 in the higher rate band at 35.75%. Total dividend tax is £11,971.25, an effective rate of 19.95%.
Retired shareholder · Margaret
£20,000 pension and £11,000 of share dividends
The pension uses the personal allowance and part of the basic rate band. After the £500 allowance, £10,500 of dividends is taxed at 10.75%: £1,128.75. Because her dividends are over £10,000, she needs to file a Self Assessment return to pay it.
Crossing into the higher rate · Daniel
£40,650 salary and £10,000 of dividends
His salary leaves only £9,620 of the basic rate band. The allowance uses £500 of it, £9,120 is taxed at 10.75%, and the last £380 at 35.75%. Dividend tax: £1,116.25. This example comes from the Low Incomes Tax Reform Group.
Dividends only · Priya
No salary and £50,000 of dividends
With no other income, the personal allowance covers the first £12,570 of dividends, and the dividend allowance the next £500. The remaining £36,930 all fits in the basic rate band at 10.75%, for £3,969.97 in total, just 7.94% of the dividends.
Over £100,000 · Holbrook Consulting Ltd
£12,570 salary and £110,000 of dividends
Total income of £122,570 cuts the personal allowance to £1,285, so part of the salary becomes taxable (£2,257) and more dividends land in the higher rate band. Dividend tax is £32,667.49.
The £500 dividend allowance
Everyone with dividends gets a dividend allowance, whatever their income. You pay no tax on the first £500 you receive in the tax year. It has been cut twice: from £2,000 to £1,000 in April 2023, and to £500 in April 2024.
It's an allowance, not a deduction. The £500 still uses up part of your basic or higher rate band, which is why someone near the top of the basic rate band can see some dividends taxed at 35.75% sooner than they expect. If your dividends are within the allowance, you don't need to tell HMRC about them.
Dividends and the £100,000 tax trap
Dividends count towards your income for the personal allowance taper. Once your total income passes £100,000, you lose £1 of allowance for every £2 above it, until it's gone at £125,140.
In that range, each extra £1 of dividends is taxed at 35.75% and also pulls more income into tax as the allowance shrinks. With a £12,570 salary, the tax on the next £1 of dividends is about 58.25%. Directors near this level often take some profit as a pension contribution instead, or leave it in the company for a later year.
What is a dividend?
A dividend is a share of a company's profit paid to its shareholders, usually so much per share. Listed companies such as banks and supermarkets typically pay them twice a year or quarterly. In a small limited company, the directors decide when to pay them, which can be monthly, quarterly or once a year, as long as there are enough retained profits to cover them.
Each dividend should be backed by a board minute and a dividend voucher showing the date, the amount and who received it. Unlike salary, dividends aren't taxed through PAYE when they're paid, so the tax is settled later through Self Assessment or your tax code.
Why directors take dividends rather than salary
Above the personal allowance, each extra £1 of salary is taxed at 20% or more, plus 8% employee National Insurance, and the company pays 15% employer National Insurance on top. Salary does reduce the company's corporation tax, but even so, dividends taxed at 10.75% in the basic rate band usually leave a director with more.
The gap has narrowed. With dividend rates up 2 percentage points from April 2026 and corporation tax at up to 25%, the right mix depends on your company's profit. The salary vs dividend calculator works it out for you.
Dividend tax for limited company directors
Most people searching for a limited company dividend calculator are directors paying themselves from their own company. The usual pattern is a salary up to the personal allowance, then the rest as dividends. Dividends have no National Insurance, which is why this mix is popular, but there are two layers of tax and one rule to keep in mind:
- 1
The company pays corporation tax
Dividends come out of profit after corporation tax, at 19% to 25%. They aren't an expense, so paying them doesn't reduce the company's bill. Work this out with our corporation tax calculator.
- 2
You pay dividend tax
You then pay dividend tax personally on what you take out, through Self Assessment. That's the figure this calculator works out.
- 3
Only pay what the company can afford
A company can only pay dividends from profits it has kept after tax. Dividends paid without enough retained profit are unlawful and may have to be repaid.
To find the best split between salary and dividends for your own profit, use the salary vs dividend calculator, which adds National Insurance and corporation tax to the picture.
How to pay less tax on dividends
There's no loophole, but a few legitimate choices make a real difference. Use the calculator to test each one with your own figures.
Use both allowances every year
With a £12,570 salary, the first £500 of dividends is tax-free. With no other income, up to £13,070 can be. Unused allowances can't be carried forward.
Time dividends around 5 April
Dividends are taxed in the tax year they're paid. If you're near a band limit, paying part of a dividend after 5 April moves it into the next year's allowances and bands.
Pension contributions
Employer pension contributions come out of company profit before corporation tax and aren't dividends. A director with a £12,570 salary who takes £100,000 of dividends plus a £10,000 pension contribution, instead of £110,000 in dividends, pays £5,825 less income tax.
Share ownership with a spouse
If your spouse or civil partner genuinely owns shares, dividends paid to them use their allowances and bands. Paying £30,000 each instead of £60,000 to one person cuts the tax from £11,971.25 to £6,342.50 if both have a £12,570 salary. Gifts of shares must be outright, so take advice first.
Hold investments in an ISA
For shares you invest in yourself, dividends inside a stocks and shares ISA are tax-free and don't use the dividend allowance. You can put in up to £20,000 a year.
Watch the £100,000 line
Between £100,000 and £125,140 the tax on extra dividends can reach 58.25%. Leaving profit in the company or paying into a pension usually beats taking it out in that range.
This is general information, not tax advice. Speak to an accountant before changing how you're paid or who owns your company's shares.
How to pay tax on dividends
How you pay depends on how much you received in dividends:
- Within your allowances: nothing to pay and nothing to report.
- £10,000 or less: tell HMRC between 6 April and 5 October after the tax year and ask for the tax to be collected through your tax code, or include it on your return if you already file one.
- Over £10,000: you must file a Self Assessment tax return. If you don't already, register by 5 October after the tax year.
For 2026/27, a Self Assessment return filed online and the tax are both due by 31 January 2028. If your bill is over £1,000, HMRC may also ask for payments on account towards the next year, each half of this year's bill, due on 31 January and 31 July. Many directors are caught out by this in their first year.
Scotland, ISAs and pensions
Scottish taxpayers pay tax on dividends at the same UK rates and bands as everyone else. Only salary, pensions and other non-savings income use Scottish rates. Tick the box in the calculator and it shows your dividend tax without the salary figure.
Dividends in an ISA or a pension are tax-free and don't use your dividend allowance, so leave them out. Shares held in an ISA are one of the simplest ways for investors to avoid dividend tax entirely.
Savings interest is taxed before dividends. If you have interest outside an ISA, add it in the advanced options, because it can push your dividends into a higher band.
HMRC's dividend tax checker vs this calculator
HMRC has a tool on gov.uk to check whether you owe tax on dividends and savings interest. It's useful for employees and pensioners with simple finances, but you can't use it if you file a Self Assessment return, which most company directors do, if your tax code isn't 1257L, or if you have foreign income or Marriage Allowance.
- This calculator works for directors and anyone else who files Self Assessment
- It handles any salary, the £100,000 personal allowance taper and the additional rate
- It compares 2026/27 with 2025/26, so you can see what the April 2026 rise costs you
- It shows each step of the working, a chart, a shareable link and a PDF for your records
Common dividend tax mistakes
Using last year's rates
The basic rate is now 10.75%, not 8.75%. On £37,700 of dividends that's £744 more than many directors have budgeted for.
Forgetting salary uses the bands first
Dividends sit on top of your other income. Working out the tax on dividends alone, as if you had no salary, usually gives too low a figure.
Treating the allowance as a deduction
The £500 is taxed at 0% but still uses your band. It doesn't push the higher rate threshold up.
Not saving for payments on account
In your first year of Self Assessment you may owe this year's tax plus half of it again in advance, all on 31 January.
Taking dividends without the profit
Dividends can only come from retained profits after corporation tax. Taking more can make them unlawful and leave you owing the money back.
Including ISA dividends
Dividends from shares in an ISA or pension aren't taxed and shouldn't be added, or you'll overstate the bill.
Notes and assumptions
- Gross figures. Enter salary and other income before tax, and the full dividends you received. UK dividends no longer come with a tax credit.
- Personal allowance order. The allowance is used against salary and other income first, then savings, then dividends, which is HMRC's standard order.
- Not included. National Insurance, Marriage Allowance, Blind Person's Allowance, pension contributions that reduce adjusted net income, Gift Aid and foreign dividends.
- Scottish taxpayers. Dividend and savings tax are correct for you. Tax on salary uses Scottish rates and is left out.
- Pennies. Tax in each band is rounded down to the penny, as in HMRC's calculations.
When to speak to an accountant
- Your income is near £100,000 and you're deciding between dividends, salary and pension contributions
- You're a director setting your pay for the year and want to include National Insurance and corporation tax
- You have dividends from overseas companies or shares held through a trust
- You've received a dividend your company may not have had the profits to pay
- You've missed a Self Assessment deadline or don't know whether you need to register
This page explains the rules and gives an estimate. It isn't tax advice for your situation.
Frequently asked questions
Quick answers about UK dividend tax.
How much tax do you pay on dividends?
It depends on your other income. The first £500 of dividends is tax-free, and any of your £12,570 personal allowance not used by salary or other income also covers dividends. 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. For example, a director with a £12,570 salary and £37,700 of dividends pays £3,999.
What is the dividend allowance for 2026/27?
£500. You pay no tax on the first £500 of dividends you receive in the tax year, whatever your income. It was £2,000 until April 2023 and £1,000 in 2023/24. The allowance still uses up part of your tax band, so it can push other dividends into a higher band.
What are the dividend tax rates for 2026/27?
From 6 April 2026 the rates are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate). Dividends are taxed at the rate of the band they fall into after your other income.
Has dividend tax gone up in 2026?
Yes. From 6 April 2026 the basic rate on dividends rose from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. The additional rate stayed at 39.35%. A director taking £37,700 of dividends with a £12,570 salary pays £744 more than in 2025/26.
Do I pay tax on dividends if my income is below the personal allowance?
Not on the part covered by allowances. If your total income, including dividends, is within your £12,570 personal allowance plus the £500 dividend allowance, there's no dividend tax. With no other income at all, you could receive £13,070 of dividends tax-free.
How is dividend tax calculated if I also have a salary?
Your salary and other income are taxed first and use up your personal allowance and tax bands. Dividends sit on top, so the band they fall into depends on how much of each band your salary has already used. That is why the calculator asks for both.
Do I need to fill in a Self Assessment tax return for dividends?
If your dividends are over £10,000, yes. If they are £10,000 or less and above your allowances, you can tell HMRC between 6 April and 5 October after the tax year and ask for the tax to be collected through your tax code, or include them on a return if you already file one. Dividends within your dividend allowance don't need to be reported.
When do I pay dividend tax?
Through Self Assessment, the tax for 2026/27 is due by 31 January 2028. If your Self Assessment bill is over £1,000, you may also have to make payments on account towards next year, due on 31 January and 31 July. If HMRC collects it through your tax code, it comes out of your pay or pension instead.
Are dividends in an ISA or pension taxed?
No. Dividends from shares held in an ISA or a pension are tax-free and don't use your dividend allowance, so leave them out of the calculator.
Does the dividend allowance count towards my tax bands?
Yes. Dividends covered by the £500 allowance aren't taxed, but they still count as income when working out which band the rest of your dividends fall into.
Do Scottish taxpayers pay different dividend tax?
No. Dividends are taxed at the same UK rates and bands across England, Wales, Scotland and Northern Ireland. Only tax on salary, pensions and other non-savings income uses Scottish rates. Tick the Scottish taxpayer box and the calculator shows your dividend tax without the salary figure.
How do dividends affect my personal allowance over £100,000?
Dividends count towards your income, so if your total is over £100,000, you lose £1 of personal allowance for every £2 above it, and all of it at £125,140. In that range the tax on each extra £1 of dividends can reach about 58.25%.
Is this a limited company dividend calculator?
Yes. Most people using it are directors paying themselves dividends from their own company. The company pays corporation tax on its profits first, and you pay dividend tax personally on what you take out. Use our corporation tax calculator for the company side and the salary vs dividend calculator to compare ways of paying yourself.
Does my company pay tax on the dividends it pays out?
No. Dividends are paid from profit after corporation tax and aren't a business expense, so they don't reduce the company's tax bill. The tax on dividends is paid by the shareholder who receives them.
Is this the HMRC dividend tax calculator?
No. HMRC has a tool on gov.uk to check tax on dividends and savings, but you can't use it if you file a Self Assessment return, which most company directors do, or if your tax code isn't 1257L. This calculator is independent, works for anyone with UK dividends, uses HMRC's published rates and is tested against HMRC's worked example.
Related calculators
Other free calculators for limited companies and their directors:
Software engineer with 10 years of experience, including building loan management software for a UK alternative lender.
Last updated 2 November 2026 · Rates checked against gov.uk on 3 November 2026 · LinkedIn (opens in new tab)
- Tax on dividends – gov.uk (opens in new tab)
- Budget 2025 rates and allowances – gov.uk (opens in new tab)
- Changes to tax rates for dividend income – gov.uk (opens in new tab)
- Tax on dividends – Low Incomes Tax Reform Group (opens in new tab)
This calculator gives estimates for guidance only and is not tax advice. Business Tax Calc is independent and not affiliated with HMRC. See our methodology for how calculations are made and tested.