About the UK Dividend Tax Calculator
This UK dividend tax calculator works out how much income tax you owe on dividends from shares, funds and your own limited company. Enter your other income (salary, pension, rental profit, self-employed profit) and your dividends for the year; it applies the personal allowance, the £500 dividend allowance and the dividend rates for each band, and shows exactly how much of your dividends is taxed at each rate.
It is especially useful for company directors deciding how to split pay between salary and dividends, and for investors with shares held outside an ISA or pension. Dividends are always treated as the top slice of income, so the same dividend can be taxed very differently depending on your salary.
Figures are for the 2026/27 tax year, when the ordinary and upper dividend rates rose by 2 percentage points: 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% above £125,140. The personal allowance of £12,570 tapers away above £100,000. Dividend bands are UK-wide, so they apply to Scottish taxpayers too.
With the default inputs, the dividend tax due is £1,021.25. Change any value above to recalculate instantly.
How to use the uk dividend tax calculator
- 1Enter your other income for the tax year — salary, pension, rental and self-employed profit.
- 2Enter the dividends you received outside ISAs and pensions.
- 3Read the dividend tax due and the split across each band.
- 4Try moving some income between salary and dividends to compare outcomes.
Formula and method
Your personal allowance is set against other income first; any unused part covers dividends. Dividends are then stacked on top of your other taxable income. The first £500 is taxed at 0% by the dividend allowance, but it still uses up band space.
The remaining dividends are split across the bands of taxable income: up to £37,700 is the basic-rate band, £37,700 to £125,140 is the higher-rate band, and anything above £125,140 is additional rate. Each slice is multiplied by its dividend rate and the results are added together. The personal allowance falls by £1 for every £2 of total income over £100,000.
- D(basic)
- Taxable dividends falling within the first £37,700 of taxable income
- D(higher)
- Taxable dividends between £37,700 and £125,140 of taxable income
- D(additional)
- Taxable dividends above £125,140 of taxable income
Worked examples
£40,000 salary and £10,000 of dividends
The salary uses the personal allowance and £27,430 of the basic-rate band. The first £500 of dividends is tax-free, and the remaining £9,500 still fits in the basic-rate band, so tax is £9,500 × 10.75% = £1,021.25.
Higher-rate taxpayer with £20,000 of dividends
A £60,000 salary already reaches the higher-rate band. After the £500 allowance, all £19,500 of remaining dividends is taxed at 35.75%, giving £6,971.25.
Company director: £5,000 salary, £30,000 dividends
£7,570 of unused personal allowance covers part of the dividends, leaving £22,430. After the £500 allowance, £21,930 is taxed at 10.75% = £2,357.48.
Income over £125,140
With £140,000 of total income the personal allowance is fully withdrawn. After the £500 allowance, £14,640 of dividends falls below £125,140 (35.75% = £5,233.80) and £14,860 above it (39.35% = £5,847.41), totalling £11,081.21.
Frequently asked questions
What is the dividend allowance for 2026/27?+
The dividend allowance is £500. It was £2,000 until April 2023, £1,000 in 2023/24 and has been £500 since April 2024. Dividends covered by it still count towards your income bands.
What are the dividend tax rates for 2026/27?+
From 6 April 2026 the rates are 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers and 39.35% for additional-rate taxpayers. The first two rose by 2 percentage points from 8.75% and 33.75%.
Do I need to tell HMRC about my dividends?+
If your dividends exceed the £500 allowance you must tell HMRC. Up to £10,000 you can ask HMRC to adjust your tax code; above £10,000 you need to file a Self Assessment tax return.
Are dividends in an ISA or pension taxed?+
No. Dividends from investments inside an ISA or a pension are tax-free and do not use your dividend allowance, so they should be left out of this calculation.
Is a salary or dividends better for a company director?+
Often a small salary around the personal allowance plus dividends is efficient, because dividends avoid National Insurance. But dividends come from profits already taxed at 19–25% corporation tax, so compare the combined cost.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.
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