Dividend Tax Calculator
Calculate UK dividend tax for 2026-27. 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.
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 (opens in new tab)Dividend tax rates are lower than income tax rates
Dividends are taxed at 10.75% (basic), 35.75% (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 (opens in new tab)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) (opens in new tab)Frequently asked questions
- How much tax do I pay on dividends in the UK for 2026-27?
- For 2026-27, the first £500 of dividends are tax-free (dividend allowance). Above that: basic-rate taxpayers pay 10.75%, higher-rate taxpayers pay 35.75%, and additional-rate taxpayers pay 39.35%. The basic and higher rates each rose by 2 points from 6 April 2026. Dividends stack on top of other income when determining which band applies.
- What is the dividend allowance for 2026-27?
- The dividend allowance for 2026-27 is £500, unchanged from 2025-26. The first £500 of dividend income is tax-free regardless of your other income. Dividends above this are taxed based on which income tax band they fall into after stacking on top of your salary.
- Should I take salary or dividends as a company director?
- Most directors take a combination: a salary up to the NI threshold (around £12,570) to maintain qualifying NI years, with additional income as dividends to reduce overall tax. The optimal split depends on total income, corporation tax, and personal circumstances.