Dividend Tax Calculator
Calculate the tax on your dividends with 2026/27 rates, the £500 allowance and your salary taken into account.
Your income
Dividend tax rates are the same across the UK. Where you live only changes the tax on your salary.
Dividend tax is paid through Self Assessment by 31 January after the tax year ends.
Dividend tax rates
| Tax band | 2025/26 | 2026/27 |
|---|---|---|
| Basic rate | 8.75% | 10.75% |
| Higher rate | 33.75% | 35.75% |
| Additional rate | 39.35% | 39.35% |
How dividends are taxed
- Your salary and other income use up your personal allowance first.
- Any allowance left over covers dividends tax-free.
- The next £500 of dividends is tax-free under the dividend allowance.
- The rest is taxed at the dividend rate for the band it falls in, with dividends treated as the top slice of your income.
Worked example: director on £12,570 salary
With £50,000 of dividends: £500 is covered by the allowance, £37,200 is taxed at 10.75% (£3,999) and £12,300 at 35.75% (£4,397.25). Total dividend tax is £8,396.25.
Sources
Figures are checked against these official sources. Last reviewed 7 November 2026.
Common questions
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 basic and higher rates went up by 2 percentage points.
How much dividend income is tax-free?
The dividend allowance is £500. On top of that, any of your £12,570 personal allowance not used by salary or other income can cover dividends too.
Do dividends in an ISA count?
No. Dividends from shares held in an ISA or pension are tax-free and do not use up your dividend allowance.
What salary should a company director take?
Many directors take a salary of £12,570 and the rest as dividends. That salary uses the personal allowance and builds State Pension entitlement with no employee National Insurance, but employer National Insurance is due at 15% above £5,000 (about £1,136) unless the company can claim Employment Allowance. A sole director with no other employees usually cannot. The best mix depends on your company, so speak to an accountant.
How do I pay dividend tax?
If your dividends are over £10,000 you must complete a Self Assessment return. Below that, you can ask HMRC to collect the tax through your tax code. Payment is due by 31 January after the tax year.