Director Dividend Tax Calculator 2026/27

Estimates only. Does not include PAYE income tax, National Insurance or corporation tax on company profits.

How it works

1. Personal Allowance (£12,570) — Your salary uses the Personal Allowance first. Any remainder shelters dividend income from tax.
2. Dividend Allowance (£500) — After the Personal Allowance, the first £500 of dividends is tax-free.
3. Band split — Dividends stack on top of non-dividend income. Salary fills the basic-rate band (up to £50,270 total income) first; dividends then fill whatever space remains.
4. Rates applied — 10.75% on dividends in the basic-rate band, 35.75% in the higher-rate band (£50,271–£125,140), 39.35% in the additional-rate band (above £125,140).

Worked example (defaults)

With a salary of £12,570 and dividends of £40,000: the salary uses the full Personal Allowance, leaving £0 PA for dividends. The £500 dividend allowance reduces taxable dividends to £39,500. The basic-rate band has £37,700 remaining (£50,270 − £12,570), but the £500 allowance uses £500 of it, so £37,200 is taxed at 10.75% (= £3,999) and £2,300 at 35.75% (= £822). Total dividend tax: approximately £4,821.

Corporation tax on company profits is separate and not included here. Use limitedcompanytaxcalculator.co.uk for a full company tax estimate.

Related guides

• Dividend tax for contractors
• How the personal allowance interacts with dividends
• Dividend tax for higher-rate taxpayers

Frequently asked questions

• Does this include corporation tax?

  No. Corporation tax is paid by the company on its profits before dividends are declared. This calculator covers only the personal dividend tax you pay as a shareholder-director. For a full company tax estimate, see limitedcompanytaxcalculator.co.uk.

• Does this include PAYE income tax or National Insurance?

  No. Only dividend tax is estimated here. Your salary will also be subject to PAYE income tax and employee/employer National Insurance contributions. Use the main UK Dividend Tax Calculator alongside an income tax calculator for a fuller picture.

• What is the most tax-efficient salary for a director in 2026/27?

  Many directors set their salary at the Primary Threshold (£12,570 for 2026/27) to avoid employee National Insurance while preserving a full year of State Pension entitlement. Taking salary above this level triggers both employee and employer NI. This calculator shows the dividend tax impact at any salary level.

Official sources

• HMRC: Tax on dividends
• HMRC: Income Tax rates and Personal Allowances