Dividend tax calculator 2026/27
Enter the dividends you receive in the tax year, and the salary or other income that sits underneath them, to see how much dividend tax is due, which rate each slice of the dividend is taxed at, and what the next pound of dividend would cost. It uses 2026/27 UK rates.
2026/27 UK ratesRates checked 16/09/2026No sign-up required
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How your dividends are taxed, slice by slice
Salary and other income are taxed first. Dividends sit on top and are taxed at whatever band is left, so the same dividend can carry two or three different rates.
Headroom before the next rate
What happens to the dividend
Built and reviewed by Luvero Accounting
- Reviewed by Dan Edwards FMAAT
- AAT licensed accountancy practice, Bawtry, South Yorkshire
- Tax rates last reviewed 16/09/2026
- How the calculators work
What this calculator works out
It places your dividends on top of your salary and other income, applies the dividend allowance, and taxes each slice at the dividend rate for the band it lands in. The result is the dividend tax for the year, the effective rate across the whole dividend, the rate on the next pound, and how much more dividend you could take before moving into a higher band.
How dividend tax works in 2026/27
Dividends are the top slice of your income. Salary, pensions, rent and other non-savings income use up the £12,570 Personal Allowance and then the £37,700 basic rate band first. Whatever is left of those is available to the dividends. The first £500 of dividends is covered by the dividend allowance and taxed at nothing, though it still occupies band width. Beyond that, dividends in the basic rate band are taxed at 10.75 per cent, in the higher rate band at 35.75 per cent, and in the additional rate band, from £125,140 of taxable income, at 39.35 per cent.
The ordinary and upper rates rose by two percentage points on 6 April 2026, from 8.75 and 33.75 per cent. The additional rate did not change. Select 2025/26 above to see the difference on your figures.
Above £100,000 of total income the Personal Allowance is withdrawn at £1 for every £2, and has gone entirely at £125,140. A dividend that pushes you through that range costs more than its headline rate because it also removes allowance from the income underneath it. The calculator shows the reduced allowance when it applies.
No tax is deducted when a dividend is paid. It is declared on your Self Assessment return and paid by 31 January after the end of the tax year, with payments on account for the following year if the bill is more than £1,000 and less than 80 per cent of your tax was collected at source. Setting the money aside as the dividends are paid is the part people most often get caught by.
Worked example: £30,000 of dividends on a £12,570 salary
No other income, 2026/27 rates. The salary exactly uses the Personal Allowance, so the whole £37,700 basic rate band is free for the dividends.
| Salary | £12,570 |
|---|---|
| Dividends | £30,000 |
| Total income | £42,570 |
| Dividend allowance, £500 at 0% | £0 |
| £29,500 of dividends at 10.75% (basic rate) | £3,171 |
| Dividend tax | £3,171 |
| Effective rate on the dividend | 10.6% |
| Rate on the next £1 of dividend | 10.75% |
| Further dividend before the higher rate | £7,700 |
Everything sits in the basic rate band. Take another £7,700 and total income reaches £50,270, after which each further pound of dividend is taxed at 35.75 per cent rather than 10.75. On £50,000 of dividends with the same salary the tax is £8,396: £3,999 on the first £37,200 above the allowance and £4,397 on the £12,300 that falls into the higher rate.
Dividend tax questions
What is the dividend allowance for 2026/27?
£500. The first £500 of dividends you receive in the tax year is taxed at nothing. It has fallen from £2,000 in 2022/23 and £1,000 in 2023/24 to £500 from April 2024, and stays at £500 for 2026/27. The allowance still uses up band width, so £500 of dividends covered by it still counts towards the £50,270 point at which the higher rate starts.
What are the dividend tax rates for 2026/27?
10.75 per cent on dividends in the basic rate band, 35.75 per cent in the higher rate band and 39.35 per cent in the additional rate band. The first two rose by two percentage points on 6 April 2026, from 8.75 and 33.75 per cent; the additional rate is unchanged. Which band applies depends on your total income, with dividends treated as the top slice.
How much dividend can I take tax-free?
With no other income at all, £13,070: the £12,570 Personal Allowance plus the £500 dividend allowance. With a salary of £12,570 the Personal Allowance is already used, so only the £500 allowance is left. Above that every pound of dividend carries tax, starting at 10.75 per cent. A common misreading is that dividends under £50,270 are tax-free; they are not, they are taxed at the basic dividend rate.
When and how do I pay dividend tax?
Through Self Assessment. Dividends are reported on the return for the tax year in which they were paid, and the tax is due by 31 January following the end of that year. If your Self Assessment bill is over £1,000 and less than 80 per cent of your tax is collected at source, HMRC also asks for payments on account towards the following year, on 31 January and 31 July, each half of the previous year's bill. If you receive dividends and do not already file a return, you need to register by 5 October after the end of the tax year.
Do I pay National Insurance on dividends?
No. Dividends are investment income, not earnings, so neither employee nor employer National Insurance applies. That is the main reason a low salary topped up with dividends usually leaves a director with more than the same amount taken as salary, even though the company has already paid Corporation Tax on the profit the dividend comes from.
What happens to dividends when my income goes over £100,000?
The Personal Allowance is withdrawn at £1 for every £2 of income above £100,000 and has gone at £125,140. A dividend in that range is taxed at 35.75 per cent and also strips allowance from the income beneath it, so the true cost of each pound is well above the headline rate. From £125,140 the additional dividend rate of 39.35 per cent applies. Whether to take a dividend that crosses £100,000, or to time it into another tax year, is a planning question for your accountant.