Dividend Tax Calculator
Work out the tax on your dividends for 2026/27, at the new rates that took effect on 6 April 2026. Enter your salary and dividends and you get the tax, your take-home, and what the rate rise costs you compared with last year.
What this dividend calculator does #
This dividend calculator UK figures are current for 2026/27. It takes your salary and dividends and works out the tax band by band, then shows your take-home. The same tool gets searched for as a dividend tax calculator, a div calculator, or just dividend calculator. They are all this page.
What most of them will not tell you is how much more you are paying than last year, because the rates changed on 6 April 2026. That figure sits under the workings above.
Dividend tax in the UK: allowance, brackets and shares #
This dividend tax calculator UK tool, also searched for as a dividend tax UK calculator, handles the whole calculation. The dividend tax allowance UK figure is £500.00, taxed at 0% but still using up basic rate band.
The dividend tax brackets UK are not separate bands of their own. Dividends sit on top of your other income and are taxed at dividend rates in whatever band space is left, which is why the same dividend can be taxed at two rates at once.
Dividend tax on shares works identically whether the shares are in your own company or in a listed company held outside an ISA or pension. Dividend tax in UK terms does not care where the dividend came from, only what your total income is. Dividends inside an ISA or a pension are not taxed at all.
Dividend tax rates for 2026/27 #
| Band | Rate now | Rate before 6 April 2026 | Change |
|---|---|---|---|
| Basic rate band | 10.75% | 8.75% | +2 points |
| Higher rate band | 35.75% | 33.75% | +2 points |
| Additional rate band | 39.35% | 39.35% | No change |
| Dividend allowance | £500 at 0% | £500 at 0% | No change |
The increase was announced at the Autumn Budget 2025 and applies from the start of the 2026/27 tax year. In cash terms it is £20 more tax on every £1,000 of dividend income falling in the basic or higher rate bands.
Dividend payment calculator, or dividend tax calculator #
A dividend payment calculator and a dividend tax calculator answer opposite halves of the same question. One asks what tax a payment attracts, the other what payment leaves you with a given amount after tax. Enter a dividend above and you get the tax and the take-home together, so it works either way round.
How dividend tax is calculated #
The order matters, and it is where most people go wrong working it out by hand.
- Your salary and other income are taxed first, at normal Income Tax rates, and they fill the bands from the bottom
- Your Personal Allowance is set against that income first
- Dividends sit on top and are taxed at dividend rates in whatever band space is left
- The first £500 of dividends is taxed at 0%, but it still uses up band space
That last point catches people out. The dividend allowance is not a deduction from your income, it is a nil rate. It does not push anything back down into a lower band.
A worked example #
A director takes a £12,570 salary and £40,000 of dividends.
- The salary is entirely covered by the Personal Allowance, so no Income Tax and no National Insurance on it
- £500 of dividends falls in the dividend allowance at 0%
- £37,200 of dividends is taxed at 10.75%, which is £3,999
- £2,300 spills into the higher rate band at 35.75%, which is £822.25
- Total dividend tax £4,821.25, leaving £47,748.75
At last year's rates the same dividends would have cost £4,031.25. The change adds £790.
Why dividends still beat salary #
Even after the rise, dividends carry no National Insurance. An extra £1,000 of salary attracts employee and employer National Insurance as well as Income Tax. An extra £1,000 of dividend attracts dividend tax only, though the company has already paid Corporation Tax on the profit it came from.
The right split depends on your profit level, and it moved this year. Work out the most efficient split.
What this calculator does not cover #
- Scottish taxpayers. Scotland sets different Income Tax bands on salary. Dividend rates are the same UK-wide.
- Student loan repayments
- Pension contributions and Gift Aid, which extend your basic rate band
- Dividends held inside an ISA, which are tax free and should not be entered here
- Payments on account already made
- The High Income Child Benefit Charge
Dividend tax rates UK wide #
Dividend tax rates UK shareholders pay are set by Westminster and are the same in Scotland, Wales and Northern Ireland. Unlike Income Tax on earnings, dividend taxation is not devolved, so a Scottish taxpayer uses the same dividend rates as everyone else even though their Income Tax bands differ.
Common questions #
What are the dividend tax rates for 2026/27?
Dividends above the £500 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. The ordinary and upper rates each rose by two percentage points on 6 April 2026. The additional rate did not change.
How much is the dividend allowance?
The dividend allowance is £500 for 2026/27, unchanged from the two years before it. Dividends within the allowance are taxed at 0%, but they still use up part of your basic rate band.
How is dividend tax calculated?
Your salary and other income are taxed first and fill the tax bands. Dividends sit on top and are taxed at dividend rates in whatever band space is left. That is why the same dividend can be taxed at two different rates.
Do I pay National Insurance on dividends?
No. Dividends carry no National Insurance, which is the main reason company directors take part of their income as dividends rather than salary.
How much more does the April 2026 change cost?
Two percentage points on dividends falling in the basic or higher rate bands, which is £20 more tax for every £1,000 of dividend income in those bands. Dividends in the additional rate band are unaffected.