Dividend tax calculator
For 2026/27 the dividend rates are 10.75% at basic rate, 35.75% at higher rate and 39.35% at additional rate, after a £500 tax-free allowance. The basic and higher rates rose by two percentage points this year, many calculators still show the old 8.75% and 33.75%.
Calculator
Dividend tax calculator
Dividend tax on £30,000
£3,171.25
You keep £26,828.75 of the dividends, 89.4%.
How the dividends are taxed
| Dividend allowance (0%) | £500.00 | £0.00 |
| Basic rate (10.75%) | £29,500.00 | £3,171.25 |
| Total dividend tax | £3,171.25 | |
No National Insurance is due on dividends, the reason the low-salary-plus-dividends structure exists. Tax on the salary itself is shown on the main calculator.
Dividend tax rates 2026/27
The rate depends on which income tax band the dividends land in once stacked on top of your other income.
| Band | Applies to | Dividend rate |
|---|---|---|
| Dividend allowance | first £500 of dividends | 0% |
| Basic rate | total income up to £50,270 | 10.75% |
| Higher rate | £50,270 to £125,140 | 35.75% |
| Additional rate | over £125,140 | 39.35% |
Source: gov.uk/tax-on-dividends, 2026/27 rates, checked 2 September 2026.
How dividends are taxed with a salary
Dividends sit on top of your other income. Your salary uses the personal allowance and the bands first; the dividends fill whatever band space remains, at the dividend rates rather than the ordinary ones. The first £500 of dividends is taxed at 0% but still occupies band space, a detail that catches people near the higher-rate line. Because no National Insurance is due on dividends at all, a small salary around the allowance plus dividends remains the standard company-director structure, though the gap has narrowed with each dividend-rate rise. At high incomes a further wrinkle applies: dividends count towards the £100,000 adjusted net income that tapers the personal allowance, so a large dividend can silently shrink the tax-free amount your salary was relying on, the calculator above handles that interaction rather than treating the two incomes separately.
The £12,570 salary plus dividends structure
Take a director paying themselves £12,570 of salary for 2026/27 — exactly the personal allowance, and also the point where employee National Insurance starts — with £37,700 of dividends on top, filling the basic-rate band to the £50,270 line. The salary carries £0 income tax and £0 National Insurance. The dividends, after the £500 allowance, are taxed at 10.75%, which comes to £3,999 — total tax of £3,999 on £50,270 of income. Taken entirely as salary instead, the same £50,270 loses £10,556 to tax and National Insurance, £6,557 more, because salary above the threshold pays 8% NI and 20% income tax where dividends pay 10.75% and no NI at all. The company has already paid corporation tax on the profit behind the dividend — the other half of the comparison, and out of scope here.
Computed from the 2026/27 rates on gov.uk/tax-on-dividends and HMRC's rates and thresholds, checked 2 September 2026.
How do you pay tax on dividends?
Not through payroll, unless you ask. Dividends within the £500 allowance need no reporting at all. Between the allowance and £10,000 you can either ask HMRC to change your tax code, so the tax comes out of your salary or pension, or declare them on a self assessment return if you already file one. Over £10,000 of dividends means a self assessment return is required — register by 5 October after the end of the tax year if you don't already file.
Source: gov.uk/tax-on-dividends, checked 2 September 2026.
What this calculator assumes
- UK-wide dividend rates and bands. Scottish rates apply only to the salary side, dividends are taxed the same in Scotland.
- Dividends paid into a pension or ISA are ignored: they are tax-free and don't belong here.
- Above £100,000 of total income the personal allowance tapers, the calculator handles it, and the ANI calculator shows the wider consequences.
- Corporation tax on the company's profits is out of scope, this is the personal side only.
Rate tables checked 28 August 2026 by Hadi against gov.uk/tax-on-dividends. Method on the about page.
How to use the dividend tax calculator
- 1
Enter your salary, which sets the band the dividends are stacked on top of.
- 2
Enter the dividends you plan to take.
- 3
Read the dividend allowance, then the tax at the ordinary, upper and additional dividend rates.
- 4
Check the combined take-home from both sources together.
When should you use the dividend tax calculator?
Use it when you take dividends alongside a salary, since the rate depends on the salary underneath them.
You run a limited company
The salary-plus-dividends split is the decision this tool exists to inform.
You hold shares outside an ISA
Dividends above the allowance are taxable even when reinvested.
You are deciding how much to draw
Dividends sit on top of your salary, so the rate depends on the salary underneath.
You are comparing salary against dividends
Dividends carry no National Insurance but are paid from profit after Corporation Tax.
Where to go next
- Outside IR35 calculatorTo model the full limited-company take-home.Open
- Self-employed tax calculatorTo compare with trading as a sole trader.Open
- Adjusted net income calculatorTo dividends count towards the £100,000 threshold.Open
All 51 calculators share one tested engine, so a figure from the dividend tax calculator agrees with every other page here. See the full calculator index or the pay and tax guides.