UK Dividend Tax
Calculator 2026/27
Enter your salary and dividend income to see exactly how much dividend tax you owe, which band your dividends fall into, and your total income tax bill after the £500 allowance.
UK dividend tax rates 2026/27
Dividends are taxed differently from earned income. They benefit from the £500 dividend allowance and lower tax rates in each band. Crucially, dividends do not attract National Insurance.
| Band | Income range | Dividend rate | Income tax rate |
|---|---|---|---|
| Personal allowance | Up to £12,570 | 0% | 0% |
| Dividend allowance | First £500 of dividends | 0% | N/A |
| Basic rate | £12,571 – £50,270 | 8.75% | 20% |
| Higher rate | £50,271 – £125,140 | 33.75% | 40% |
| Additional rate | Above £125,140 | 39.35% | 45% |
How band stacking works
Your salary and other non-dividend income is placed into the tax bands first. Dividends are then stacked on top of that. So if your salary is £45,000, dividends start in the basic rate band. But if your salary is £52,000, dividends start in the higher rate band from the first pound above the allowance.
Self-assessment and dividend tax
If you receive more than £500 in dividends, you must declare them on a Self Assessment tax return. Dividend tax is collected through Self Assessment, not through PAYE. HMRC may adjust your tax code to collect smaller amounts of dividend tax in-year.
Related calculators
Dividend tax is usually considered alongside the contractor structure — our contractor calculator shows the full limited company take-home combining salary and dividends. Our income tax calculator covers the PAYE income tax on any salary element. The main salary calculator provides the comparison benchmark for employed income. Your National Insurance calculator is relevant for the Class 1 NI on your director's salary. To see whether your combined income (salary plus dividends) crosses a higher band threshold, use our tax band calculator. If you also contribute to a pension from your company, our pension calculator shows how employer contributions reduce your corporation tax.
Frequently asked questions
The dividend allowance is £500 for 2026/27. This means the first £500 of dividend income is free from dividend tax. The allowance was cut from £1,000 to £500 in April 2024. Note that dividends still count toward your total income for the purposes of determining which tax band you are in.
Dividend tax is paid through Self Assessment. You must register for Self Assessment if you receive more than £500 in dividends in a tax year. The tax is due by 31 January following the end of the tax year. If you are already on Self Assessment, simply include your dividend income on your tax return.
No. Dividends are not subject to National Insurance contributions. This is the principal tax advantage of drawing income from a limited company as dividends rather than as salary — the NI saving can be significant at higher income levels.
Yes. Dividends received within a Stocks and Shares ISA are completely free from dividend tax regardless of the amount. The annual ISA allowance is £20,000. Holding dividend-paying investments inside an ISA is a straightforward way to shelter dividend income from tax.