Dividend tax calculator 2026-27

How this is worked out

• Dividend tax rates: 2026-27: 10.75% basic, 35.75% higher, 39.35% additional. 2025-26: 8.75%, 33.75% and 39.35%.
• Dividend allowance: £500 in both years. It's a 0% rate, not an exemption, so those £500 still use up band space.
• Personal Allowance: £12,570, cut by £1 for every £2 of income over £100,000 (zero at £125,140). It's used by your salary first, then by dividends.
• Bands (taxable income after the Personal Allowance): basic rate up to £37,700, higher rate up to £125,140, additional rate above that. Dividends sit on top of your other income.
• Salary tax line: 20%, 40% and 45% (England, Wales and Northern Ireland). Scottish taxpayers pay the same tax as the rest of the UK on dividends, but their salary tax uses Scottish bands, so ignore that line.
• Not included: savings interest, pension contributions or Gift Aid that lower your adjusted net income, Marriage Allowance, National Insurance and student loans.

Sources: GOV.UK tax on dividends, Income Tax rates and allowances, Income Tax rates, Scottish Income Tax. Checked 17 October 2026. General guidance only, not tax or financial advice.

How dividend tax works

A dividend is a share of a company's profit paid to its shareholders. If you run your own limited company, it's often how directors pay themselves on top of a salary. Dividends aren't taxed when they're paid to you. Instead, you work out the tax for the whole tax year (6 April to 5 April).

Start with your total income: salary plus dividends plus anything else. Your Personal Allowance of £12,570 covers your salary first. Any allowance left over covers dividends, tax-free. Then the next £500 of dividends falls in the dividend allowance at 0%. Whatever's left is taxed at the dividend rate for the band it lands in. Because dividends are stacked on top of your salary, the higher your salary, the more of your dividends land in the higher band.

Above £100,000 of income, you lose £1 of Personal Allowance for every £2. That pushes more income into tax, so dividends between £100,000 and £125,140 cost much more than the headline rate.

Worked example

A director takes a £12,570 salary and £50,000 of dividends in 2026-27. The salary uses the whole Personal Allowance, so there's no tax on it. Of the dividends:

• £500 is in the dividend allowance: £0
• the next £37,200 fills the rest of the £37,700 basic rate band at 10.75%: £3,999.00
• the last £12,300 is higher rate at 35.75%: £4,397.25

Total dividend tax: £8,396.25, an effective rate of 16.8%. The same figures in 2025-26 gave £7,406.25, so the new rates cost this director £990 more a year.

Salary vs dividends: things to know

This isn't advice, just the moving parts. Salary is a business expense for your company, but it can bring employee and employer National Insurance. Dividends carry no National Insurance, but they can only be paid out of profits left after Corporation Tax. Pension contributions, student loans, Child Benefit and the £100,000 taper can all change the answer. A small salary plus dividends is a common setup, but the right mix depends on your own figures, so check with an accountant before you decide.

Paying the tax

If your dividends are over £10,000, you need to fill in a Self Assessment return. If you don't already send one, register by 5 October after the tax year ends. The tax is due by 31 January after the tax year (31 January 2028 for 2026-27), and you may also have to make payments on account. If your dividends are £10,000 or less and you don't send a return, tell HMRC between 6 April and 5 October. They can collect the tax through your tax code, or you can contact the helpline.

General guidance only, not tax or financial advice. Tax rules depend on your circumstances and can change.

FAQ

How much is the dividend allowance for 2026-27?
£500. It was also £500 in 2025-26 and 2024-25 (it was £1,000 in 2023-24). The first £500 of dividends above your Personal Allowance is taxed at 0%, but it still counts as income and uses up part of your tax band.

What are the dividend tax rates for 2026-27?
From 6 April 2026 to 5 April 2027 dividends above the allowance are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. In 2025-26 the rates were 8.75%, 33.75% and 39.35%.

Are dividends taxed on top of my salary?
Yes. Your salary and other income use up your Personal Allowance and tax bands first, and dividends sit on top. So a £20,000 dividend can be partly basic rate and partly higher rate, depending on what else you earn.

Do I need to fill in a Self Assessment tax return for dividends?
If your dividends are over £10,000 in a tax year you need to fill in a Self Assessment return, and if you don't already send one you must register by 5 October after the tax year ends. If they're £10,000 or less and you don't send a return, you can ask HMRC to collect the tax through your tax code or contact the helpline. You don't need to tell HMRC if your dividends are within the dividend allowance.

I live in Scotland. Does this calculator work for me?
For the dividend tax, yes: GOV.UK says Scottish taxpayers pay the same tax as the rest of the UK on dividends. The tax on your salary is different, because Scotland has its own bands for wages, pensions and most other income, so ignore the salary tax line in this calculator.

Is it better to take salary or dividends from my limited company?
It depends on your company's profits, Corporation Tax, National Insurance, pension contributions and other income, so there's no single answer. This calculator shows the personal tax on dividends only. Speak to an accountant before deciding how to pay yourself.

Plan for the tax bill

Put the tax aside as the dividends come in, and add the deadlines to your calendar so 5 October, 31 January and 31 July don't sneak up on you. More spreadsheets for UK tax and money are in the Tidy Sheets shop.

Free tax set-aside calculator

Add every Self Assessment date with the free UK tax deadlines calendar. Near £100,000? The pension and adjusted net income calculator and the £100,000 tax trap guide show how a pension payment changes things. Getting Child Benefit? Dividends count towards the High Income Child Benefit Charge. Browse more spreadsheets in the shop.

Official sources

Tax on dividends (GOV.UK)
How to report tax on dividends (GOV.UK)
Income Tax rates and allowances for current and past years (GOV.UK)
Income Tax rates and Personal Allowances (GOV.UK)
Scottish Income Tax (GOV.UK)
Register for Self Assessment (GOV.UK)
Self Assessment deadlines (GOV.UK)