Dividend tax calculator
What you will pay on your dividends at the 2026/27 rates, worked out on top of your salary. Shows which slice was taxed in which band.
The rates went up in April 2026
Dividend tax rose on 6 April 2026. The basic rate went from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. The additional rate stayed at 39.35%.
- Basic rate: 10.75%
- Higher rate: 35.75%
- Additional rate: 39.35%
Plenty of pages and spreadsheets still carry the old figures, so it is worth checking the year on anything you compare this against. On £10,000 of dividends next to a £60,000 salary, the two-point rise costs an extra £190.
Dividends are taxed on top of everything else
This is the part that makes dividend tax awkward, and the reason this calculator asks for your salary.
Dividends sit at the top of your income. Your salary fills the bands from the bottom, and the dividends are taxed in whatever band is left above it. So the same dividends can cost wildly different amounts.
Same dividends, triple the tax. £10,000 of dividends next to a £30,000 salary costs £1,021.25, because they land in the basic band. The same £10,000 next to a £60,000 salary costs £3,396.25, because they land in the higher band. Any calculator that asks only for the dividend figure cannot tell you which of those you are.
The £500 allowance uses up band space
The first £500 of dividends is taxed at 0%. But it still occupies room in your tax band, rather than sitting outside the system.
Why that matters. On a salary of exactly £50,270 your basic band is already full. Take £1,000 of dividends: £500 is covered by the allowance, and the other £500 is taxed at the higher rate of 35.75%, giving £178.75. The allowance did not shelter anything into a lower band, it just stopped £500 being taxed.
Tax-free dividends with no other income
If dividends are your only income, the personal allowance of £12,570 covers them first, and the £500 dividend allowance sits on top. That makes £13,070 of dividends completely tax-free.
Above that, tax starts. On £13,071 you would owe roughly 11p, which is a fair illustration of how sharp the edge is rather than a reason to lose sleep.
The £100,000 trap
Above £100,000 of total income, your personal allowance shrinks by £1 for every £2 over, and it is gone entirely at £125,140. Dividends count towards that total.
So dividends can cost you more than their own tax rate suggests: they can also strip away allowance that was sheltering your salary. The calculator applies the taper, and says so when it bites.
Common questions
What is the dividend tax rate for 2026/27?
10.75% for basic rate taxpayers, 35.75% for higher rate and 39.35% for additional rate. The basic and higher rates both rose by two percentage points on 6 April 2026, from 8.75% and 33.75%.
How much dividend can I take tax-free?
£500 through the dividend allowance, on top of whatever your personal allowance covers. If dividends are your only income, the £12,570 personal allowance plus the £500 allowance means £13,070 is tax-free.
Why does the calculator ask for my salary?
Because dividends are taxed on top of your other income. £10,000 of dividends costs £1,021.25 next to a £30,000 salary and £3,396.25 next to a £60,000 one. Without your salary, there is no way to tell which band your dividends land in.
Does the £500 dividend allowance save me tax at my highest rate?
It stops £500 being taxed, but it still takes up room in your band, so it cannot move the rest of your dividends down into a lower band. On a £50,270 salary, £1,000 of dividends still leaves £500 taxed at 35.75%.
Do dividends affect my personal allowance?
Yes. Above £100,000 of total income the personal allowance drops by £1 for every £2 over and disappears at £125,140, and dividends count towards that total. Taking dividends near £100,000 can cost more than the headline rate suggests.
Do I pay National Insurance on dividends?
No. Dividends carry income tax only, which is a large part of why company directors often take a small salary and the rest as dividends. The tax rise in April 2026 narrowed that gap.
When do I pay the tax on my dividends?
Through Self Assessment, by 31 January after the end of the tax year, unless the dividends are under £10,000 and you ask HMRC to collect it through your tax code instead. This calculator gives the liability, not the payment date.