Estimate dividend tax due after the £500 dividend allowance, split across basic (10.75%), higher (35.75%) and additional (39.35%) rate bands.
Calculator checked against GOV.UK and HMRC rules on (how we check).
Dividends are taxed after all other income. The £500 dividend allowance shelters the first £500 of dividends from tax. Above that, the rate depends on which income tax band the dividends fall in:
Employment and other non-dividend income fills the lower bands first, pushing dividends into higher bands if applicable.
The same dividend costs far more on top of a higher salary, because it falls into a higher band.
| Dividends | No other income | £30,000 salary | £60,000 salary |
|---|---|---|---|
| £1,000 | £0 | £53.75 | £178.75 |
| £5,000 | £0 | £483.75 | £1,608.75 |
| £10,000 | £0 | £1,021.25 | £3,396.25 |
| £20,000 | £744.98 | £2,096.25 | £6,971.25 |
| £50,000 | £3,969.97 | £12,753.75 | £17,696.25 |
| £100,000 | £21,777.47 | £33,946.21 | £36,826.21 |
For an earlier tax year, use the previous years calculator. If you run a company, the director calculator starts from your salary and profit. Dividends are taxed at the same rates in Scotland.
Enter your salary (with any other income taxed before dividends) and your dividends. The calculator then follows HMRC's order. First it works out the Personal Allowance, reducing it by £1 for every £2 of adjusted net income over £100,000. The allowance is set against your salary and other income first.
Next it sets out how much of the £37,700 basic-rate band and the higher-rate band, which runs to £125,140 of taxable income, your other income has used. Dividends are stacked on top. Any Personal Allowance left over covers the first dividends, then £500 is taxed at 0%, then the rest at 10.75%, 35.75% or 39.35%, depending on where each pound lands.
The result is the dividend tax only. It does not include Income Tax or National Insurance on your salary, Corporation Tax paid by a company, or student loan repayments. Dividend rates are the same across the UK, so the figure applies in Scotland too, even though Scottish rates apply to the salary itself.
| Where your income sits | Salary | Extra dividend tax | Extra tax on salary | Total cost of £1,000 |
|---|---|---|---|---|
| Basic rate | £30,000 | £107.50 | £0 | £107.50 |
| Just over £50,270 | £52,000 | £357.50 | £0 | £357.50 |
| £100,000 to £125,140 | £105,000 | £357.50 | £200.00 | £557.50 |
| Over £125,140 | £130,000 | £393.50 | £0 | £393.50 |
2026/27, rest-of-UK bands. Each row starts with £5,000 of dividends already received and adds £1,000. In the £100,000 to £125,140 row the extra dividend also removes £500 of Personal Allowance, which raises the tax on the salary.
A £40,000 salary with £20,000 of dividends gives dividend tax of £4,528.75, an effective rate of 22.6% on the dividends. That average hides two rates: £9,770 is taxed at 10.75% and £9,730 at 35.75%. Use the effective rate to budget; use the marginal rate in the table above to decide whether to take more.
Every figure here is worked out by the same code as the calculator, using 2026/27 rates unless another year is named. Estimates for planning, not tax advice.
Checked against these pages on 4 November 2026.
The same rules produce very different bills depending on how much other income sits underneath the dividends. These four cases run through the calculator above.
| Scenario | Salary | Dividends | Tax-free | At 10.75% | At 35.75% | At 39.35% | Dividend tax | Effective rate |
|---|---|---|---|---|---|---|---|---|
| Director, £12,570 salary | £12,570 | £10,000 | £500 | £9,500 | £0 | £0 | £1,021.25 | 10.2% |
| Employee, £35,000 salary | £35,000 | £10,000 | £500 | £9,500 | £0 | £0 | £1,021.25 | 10.2% |
| Higher-rate earner | £60,000 | £20,000 | £500 | £0 | £19,500 | £0 | £6,971.25 | 34.9% |
| £100,000 salary, allowance tapered | £100,000 | £40,000 | £500 | £0 | £24,640 | £14,860 | £14,656.21 | 36.6% |
2026/27 rates. Each row runs the calculator above. "Tax-free" is unused Personal Allowance plus the £500 allowance; the income tax on each salary is shown by the calculator, not in this table.
The first two rows cost the same. In both, the whole £9,500 above the allowance fits inside the basic-rate band, so it is all taxed at 10.75%. A higher salary only starts to matter once it pushes the dividends past £50,270 of total income.
In the last row, total income of £140,000 removes the Personal Allowance entirely (it is withdrawn at £1 for every £2 above £100,000). The higher-rate band then ends at £125,140 of taxable income, and the dividends above that point are taxed at 39.35%.
| Tax year | Allowance | Basic | Higher | Additional |
|---|---|---|---|---|
| 2016/17 to 2017/18 | £5,000 | 7.5% | 32.5% | 38.1% |
| 2018/19 to 2021/22 | £2,000 | 7.5% | 32.5% | 38.1% |
| 2022/23 | £2,000 | 8.75% | 33.75% | 39.35% |
| 2023/24 | £1,000 | 8.75% | 33.75% | 39.35% |
| 2024/25 to 2025/26 | £500 | 8.75% | 33.75% | 39.35% |
| 2026/27 | £500 | 10.75% | 35.75% | 39.35% |
The dividend allowance was introduced in April 2016. Rates rose by 1.25 points in April 2022 and the basic and higher rates by a further 2 points from 6 April 2026. Source: GOV.UK, Tax on dividends and HMRC rates and allowances.
Because dividends are treated as the top slice of your income: your salary, pension or rent fills the Personal Allowance and the bands first, and the dividends are taxed at whatever rate is left above it. The same £10,000 of dividends costs very different amounts on a £12,570 salary and on a £60,000 one, as the worked examples below show. The £500 allowance applies in every case, and it still uses up band space.
You must tell HMRC if your total dividend income exceeds £500. Up to £10,000 you can ask HMRC to collect the tax through your tax code; above £10,000 you must register for Self Assessment and file a tax return.
No. Dividends received within a Stocks and Shares ISA are completely free from UK tax and do not need to be declared on a tax return.
Yes. If your total income (employment plus dividends) is within the personal allowance (£12,570), no tax is due on any of it. The personal allowance is used up first by non-dividend income, with any remaining allowance set against dividends.
This calculator provides estimates only. It does not constitute financial, tax or legal advice. Always check current GOV.UK guidance and consult a qualified adviser before making decisions.
Reviewed by the UKDividendTaxCalculator team.
Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us