Dividend Tax Calculator

How this calculator works

Dividends are taxed differently from wages. They are treated as the top slice of your income, so the rate you pay depends on how much other income you have. The calculator follows the same order HMRC uses:

1. It works out your Personal Allowance (£12,570, tapered above £100,000 of total income) and uses it against your other income first. Any unused allowance covers dividends.
2. It adds your dividends on top of your other taxable income.
3. The first £500 of dividends is covered by the dividend allowance and taxed at 0%. This £500 still uses up part of your basic or higher rate band.
4. The rest is taxed at the dividend rate for the band it falls in. From 6 April 2026 these rates are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate).

The calculator shows the dividend tax separately, as well as Income Tax on your other income for reference. Enter other income as taxable income from employment, self-employment, pensions or property, after pension contributions made through a net pay arrangement.

Worked examples

Example 1: GOV.UK example

GOV.UK gives this example: £29,570 in wages and £3,000 in dividends. The Personal Allowance covers £12,570 of wages, leaving £17,000 taxed at 20% (£3,400). Of the dividends, £500 is covered by the allowance and £2,500 is taxed at 10.75%. Dividend tax: £268.75. The calculator matches this exactly.

Example 2: higher-rate taxpayer

With a £60,000 salary, all dividends fall in the higher-rate band. On £10,000 of dividends, £500 is covered by the allowance and £9,500 is taxed at 35.75%: £3,396.25.

Example 3: dividends only

A company director taking £12,570 salary and £20,000 dividends has no allowance left for dividends. £500 is covered by the dividend allowance and £19,500 is taxed at 10.75%: £2,096.25. These examples were also checked by hand.

2026/27 dividend tax rates

The basic-rate band is the first £37,700 of taxable income; the additional rate applies above £125,140.

Assumptions and what this calculator does not cover

• Savings interest: interest and the Personal Savings Allowance are not included. Savings sit between other income and dividends in the order of tax, so they can push dividends into a higher band.
• Scotland: dividends are taxed at UK dividend rates wherever you live, but Scottish taxpayers’ other income uses Scottish bands. The "other income" tax figure here uses the rest-of-UK bands.
• ISAs and pensions: dividends from shares held in an ISA are tax-free and should not be entered. Dividends inside a pension are not taxed this way.
• Gift Aid and pension contributions: relief at source pension contributions and Gift Aid extend your basic-rate band; this is not modelled.
• Reporting: how you tell HMRC about dividend income depends on the amount and your circumstances. Check GOV.UK.

Planning points

The dividend rates for basic and higher-rate taxpayers went up by 2 percentage points from April 2026. If you run your own limited company, the balance between salary and dividends affects corporation tax, National Insurance and personal tax together. This calculator only covers the personal tax on dividends, so it is worth getting advice from an accountant before you change how you pay yourself.

For investors, holding shares or funds in a stocks and shares ISA keeps dividends outside the tax system altogether. The ISA calculator shows how regular payments into an ISA could grow. Remember that investments can go down as well as up.

Dividends are taxed in the year they are paid to you, not the year the company made the profit. If you receive dividends close to 5 April, check which tax year they fall in.

Paying the tax

Dividends are paid without tax taken off, so any dividend tax is usually collected either through your tax code or through Self Assessment. If you already file a tax return, include your dividends there. If you do not, GOV.UK explains when you need to tell HMRC and how. Keep the dividend vouchers or statements from each company or platform, as they show the amount and the date paid.

Frequently asked questions

What is the dividend allowance for 2026/27?

£500. Dividends within the allowance are taxed at 0%, but they still count towards your income bands.

What are the dividend tax rates from April 2026?

10.75% for basic-rate taxpayers, 35.75% for higher rate and 39.35% for additional rate.

Do I pay tax on dividends in an ISA?

No. Dividends from shares held in an ISA are tax-free.

Are dividends taxed differently in Scotland?

No. Dividend tax rates are the same across the UK.

Sources

• GOV.UK: Tax on dividends
• GOV.UK: Income Tax rates and Personal Allowances
• GOV.UK: Tax on savings interest
• GOV.UK: Individual Savings Accounts (ISAs)

Rates for tax year 2026/27, last reviewed October 2026.

Results are estimates for planning, not financial or tax advice. See our terms and methodology.