Dividend Tax Calculator 2025/26 & 2026/27
Estimate the tax on UK and foreign dividends after the dividend allowance, other income, Personal Allowance, Scottish non-savings rates and common Self Assessment adjustments. The result is a dividend-focused estimate, not a replacement for a full tax return.
Quick decision check
Most dividend mistakes come from the income around the dividend
Enter salary, pension, rental profit and savings interest before dividends. Those amounts use allowances and tax bands first, so the same £10,000 dividend can be mostly tax-free for one person and mostly higher-rate for another. Leave ISA dividends out entirely.
Core Details
Leave out ISA dividends — they are tax-free!
Allowances & Band Extenders
Gross amount (extends basic-rate band)
Gross amount (extends basic-rate band)
Advanced estimates (foreign dividends, HICBC, student loans)▼
Capped against an estimated UK tax amount for the foreign dividends
Limited company director? Your company pays Corporation Tax before dividends are paid. The Small Profits Rate is 19% up to £50,000, the main rate is 25% above £250,000, and marginal relief can apply between those limits. Enter the dividends you personally receive, not company profit.
Your Tax Breakdown
Income Stack
Tax Calculation
Dividend Tax Rates — 2024/25, 2025/26 & 2026/27
Dividend tax rates are lower than income tax rates — that's what makes them tax-efficient. But they're going up from April 2026.
| Tax Band | Total Income | 2024/25 | 2025/26 | 2026/27 ⚠️ |
|---|---|---|---|---|
| Dividend Allowance | First £500 | 0% | 0% | 0% |
| Basic Rate | Up to £50,270 | 8.75% | 8.75% | 10.75% |
| Higher Rate | £50,271 – £125,140 | 33.75% | 33.75% | 35.75% |
| Additional Rate | Over £125,140 | 39.35% | 39.35% | 39.35% (Unchanged) |
Last verified: June 6 2026. Sources include GOV.UK dividend tax guidance and HMRC income tax rates and allowances.
How Dividend Tax Works — The Plain English Version
Dividends are taxed differently from your salary. Here's what you actually need to know:
1. Dividends are taxed after everything else
HMRC takes your salary, rental income, pension, and any other non-dividend income first. That "uses up" your Personal Allowance (£12,570) and tax bands. Your dividends then sit on top of all that. This means if your salary already puts you into the higher-rate band, every penny of dividends is taxed at 33.75% (or 35.75% from April 2026).
2. You get a £500 tax-free allowance (but it's shrinking)
The first £500 of dividends each year is tax-free. But here's the catch — it still uses up your basic-rate band. So it's tax-free, but it pushes the rest of your dividends higher up the bands.
The allowance has been slashed over the years:
2016/17
£5,000
2018/19
£2,000
2023/24
£1,000
2024/25
£500
2025/26+
£500
3. Dividends don't attract National Insurance
This is the big advantage. Salary above £12,570 costs you 8% employee NI plus your employer pays 15% employer NI on top. Dividends? Zero NI — for you or your company. That's why the "low salary, high dividends" strategy exists.
4. But dividends come from after-tax profits
If you're a limited company director, your company pays Corporation Tax on its profits before you can take dividends. The company rate can be 19%, 25%, or an effective marginal rate between those figures depending on profit level, associated companies and marginal relief. The calculator above starts after that company-level tax: enter the dividends you personally receive.
💡 The Low Salary + High Dividends Strategy
Most limited company directors don't pay themselves a large salary. Instead, they use a well-known (and perfectly legal) strategy:
Step 1: Pay a small salary
Set your salary at £12,570 to use up your full Personal Allowance tax-free. At this level, you pay zero income tax and zero employee NI. Your company pays a small amount of employer NI (15% on the amount above £5,000 = about £1,136/year).
Step 2: Take the rest as dividends
Pay yourself the remaining profit as dividends. The first £500 is tax-free, and the rest is taxed at just 8.75% (basic rate) — far less than the 20% income tax + 8% NI you'd pay on salary.
Worked Example — 2025/26
Suppose you receive a £12,570 salary and £30,000 in dividends in 2025/26, with no other income. Your salary uses the Personal Allowance. The first £500 of dividends is taxed at 0%, and the remaining £29,500 sits in the basic-rate band at 8.75%, giving dividend tax of about £2,581. In 2026/27, the same dividend pattern would use the same £500 allowance but the basic dividend rate rises to 10.75%, increasing that dividend tax to about £3,171. Company Corporation Tax is separate and happens before dividends are paid.
⚠️ Heads Up: Dividend Tax Is Rising from April 2026
The Autumn Budget 2025 confirmed a 2 percentage point increase on basic and higher rate dividend tax from 6 April 2026. Basic rate goes from 8.75% to 10.75%, higher rate from 33.75% to 35.75%, while the additional rate remains at 39.35%. If you regularly take large dividends, consider whether it's worth bringing forward dividend payments before April 2026 — speak to your accountant about the timing.
Dividends Inside an ISA — Completely Tax-Free
If you hold shares inside a Stocks & Shares ISA, the dividends are 100% tax-free. They don't count towards your £500 dividend allowance, they don't count towards your total income, and they don't push you into higher tax bands. The current ISA limit is £20,000 per tax year.
This is separate from your limited company dividends — ISA dividends come from shares you've purchased as a personal investment. If you're building a share portfolio alongside running a company, an ISA shelter should be your first stop.
Do You Need to Tell HMRC About Your Dividends?
Dividends are not normally taxed at source like salary. If they exceed the dividend allowance, you need to tell HMRC or include them on your Self Assessment return.
No action needed if:
- Your dividends are within the £500 allowance
- You have no other reason to file a tax return
Tell HMRC if:
- Your dividend income exceeds £500
- HMRC asks you to file, or another Self Assessment trigger applies
- You already file Self Assessment
- Your dividend income is over £10,000, where Self Assessment is normally needed
For dividends above the allowance but not over £10,000, GOV.UK says you can tell HMRC and may be able to pay through a tax-code change or Self Assessment. If you do file online, the deadline is 31 January following the end of the tax year. So for 2026/27 dividends, you'd file by 31 January 2028.
How this dividend tax calculator works
Inputs used
- Tax year, UK region, salary, pension income, self-employment profit, rental income, savings interest and dividends outside ISAs.
- Gross relief-at-source pension contributions and gross Gift Aid donations, because those can extend the basic and higher-rate bands.
- Optional foreign dividends, foreign tax paid, Child Benefit and student loan plan for a wider Self Assessment sense-check.
Calculation method
- It estimates adjusted net income, applies the Personal Allowance taper above £100,000, then stacks non-savings income before savings and dividends.
- Dividend allowance is applied at 0%, then dividend income is taxed through taxable basic, higher and additional bands for the selected year, after Personal Allowance taper or Blind Person's Allowance adjustments.
- Marriage Allowance is treated as a tax reducer for the recipient, not as extra Personal Allowance, and is only applied when the entered income appears within the eligible recipient band.
- HICBC uses the Child Benefit rates and charge thresholds for the selected tax year where available.
Assumptions
- The calculator assumes you are UK resident and that dividends are not held inside an ISA or pension wrapper.
- Foreign Tax Credit Relief is estimated by capping the credit against the estimated UK tax attributable to the foreign dividend share. Complex treaty positions may differ.
- Student loan repayments are shown separately because they are repayments, not income tax.
What this does not cover
- It does not calculate company Corporation Tax before dividends are paid. Use the Corporation Tax calculator for company profit estimates.
- It is not a full Self Assessment replacement and does not cover every relief, charge, residence issue, remittance basis case or double tax treaty rule.
- For detailed Child Benefit positions, compare the estimate with the High Income Child Benefit Charge calculator and GOV.UK guidance.
Official sources
Last verified: June 6 2026. Calculations are estimates based on the published rules and assumptions shown on this page.
- GOV.UK - Tax on dividends - dividend allowance, dividend rates and how dividends are taxed
- HMRC rates and allowances - Income Tax - Personal Allowance, dividend rates, savings rates and Blind Person's Allowance
- GOV.UK - Marriage Allowance - transferable allowance rules and the tax reduction for the recipient
- GOV.UK - Corporation Tax rates - Small Profits Rate, main rate and marginal relief bands for companies
- GOV.UK - Child Benefit rates - weekly Child Benefit rates used for HICBC estimates
- GOV.UK - High Income Child Benefit Charge - charge thresholds and taper method
- GOV.UK - National Insurance rates and allowances - employer secondary threshold used in director salary discussion