Dividend Tax Calculator

Calculate UK dividend tax for 2025-26. See how your dividends are taxed alongside salary income, with a full band breakdown. Includes the £500 dividend allowance, basic, higher and additional rate calculations, and personal allowance taper.

Your Income

Annual salary / other income

Annual dividend income

Tax year

Apply personal allowance (£12,570)

Total income£50,000

Dividend allowance£500

Dividend tax

£1,706

Effective rate: 8.5%

Total take-home

£43,413

£3,618/month

Dividend Tax Breakdown

Band	Rate	Taxable	Tax
Dividend Allowance	0%	£500	£0
Basic Rate	8.75%	£19,500	£1,706
Total dividend tax	8.5%		£1,706

Full Income Summary

Salary / other income£30,000

Dividend income£20,000

Income tax (on salary)-£3,486

National Insurance-£1,394

Dividend tax-£1,706

Total tax£6,587

Effective total rate13.2%

Net annual income£43,413

Net monthly£3,618

Marginal dividend rate

8.75%

Rate on your next £1 of dividends

Personal allowance

£12,570

Taxable dividends

£19,500

After £500 allowance

Smart Tips

You may need to file a Self Assessment tax return

If your dividend income exceeds the £500 allowance, you'll usually need to tell HMRC. If your total untaxed income exceeds £10,000, you must register for Self Assessment.

GOV.UK: Self Assessment tax returns

Dividend tax rates are lower than income tax rates

Dividends are taxed at 8.75% (basic), 33.75% (higher), and 39.35% (additional) — lower than the equivalent income tax rates of 20%, 40%, and 45%. This is because company profits have already been subject to corporation tax before being distributed as dividends.

GOV.UK: Tax on dividends

Dividends in an ISA are completely tax-free

Shares held within a Stocks & Shares ISA generate tax-free dividends. You can invest up to £20,000 per year into ISAs. Moving investments into an ISA could save you dividend tax in future years.

GOV.UK: Individual Savings Accounts (ISAs)