How to use the Dividend Tax Calculator
- 1 Enter the dividends you receive in the tax year.
- 2 Enter your salary and other income, such as pension or rental profit.
- 3 Read your dividend tax and the effective rate.
- 4 Check the table to see how much falls in each band.
Worked example
£10,000 of dividends on top of a £40,000 salary. The salary uses the full personal allowance. The first £500 of dividends is covered by the dividend allowance, and the remaining £9,500 falls in the basic rate band at 10.75%, so dividend tax is £1,021.25. You keep £8,978.75 of the dividends.
Features
New 2026/27 rates
10.75% ordinary rate and 35.75% upper rate after the Budget increase, and 39.35% additional rate.
Dividend allowance
The first £500 of dividends is taxed at 0%.
Uses your bands correctly
Dividends sit on top of other income, so the calculator places them in the right bands.
Personal allowance
Any unused personal allowance covers dividends first.
When to use it
Company directors
Plan the mix of salary and dividends from your limited company.
Investors
Estimate tax on dividends from shares held outside an ISA.
Self Assessment
Check the dividend figure before filing your return.
Budget change
See how much more you pay after the April 2026 rate rise.
Frequently asked questions
What are the dividend tax rates for 2026/27?
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 6 April 2026.
What is the dividend allowance?
£500. Dividends within it are taxed at 0%, but they still count toward your income when deciding which band later dividends fall into.
Are ISA dividends taxed?
No. Dividends from shares in an ISA or a pension are tax-free and do not use the allowance.
How do I pay dividend tax?
If dividends are over £10,000 you must file a Self Assessment return. Below that, you can ask HMRC to collect it through your tax code.
What is the best salary and dividend mix?
Many directors take a salary near the personal allowance and the rest as dividends, because dividends do not attract National Insurance. Since the rate rise, the saving is smaller, so check with an accountant.
Does this work in Scotland?
Yes. Dividend tax rates and bands are the same across the UK, although Scottish taxpayers have different rates on salary.
Do dividends affect my personal allowance?
Yes. Dividends count toward adjusted net income, so they can reduce the personal allowance once total income is over £100,000.
Do dividends count for National Insurance?
No. Dividends are not earnings for National Insurance, which is the main reason directors of small companies pay part of their income as dividends rather than salary.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated