Dividend Tax Calculator 2026/27

How it's calculated

Dividend Income Tax is charged on the dividends you receive from shares — including dividends you pay yourself from your own limited company — but never in isolation. HMRC treats dividends as the top slice of your income, so the rate you pay depends on what other income you already have. The calculation runs in a fixed order. Your personal allowance of £12,570 is applied to your salary and other non-dividend income first; only the part of the allowance your salary does not use can shelter dividends. That allowance is withdrawn by £1 for every £2 of total income above £100,000 and reaches zero at £125,140. Every taxpayer then gets a separate dividend allowance of £500, taxed at 0%. The important catch is that this £500 is not extra band space — it still counts towards the £50,270 basic-rate and £125,140 higher-rate limits, so it can nudge your remaining dividends into a higher band even though no tax is due on the £500 itself. Whatever dividends are left are then taxed by band at the dividend rates: 10.75% (ordinary rate) within the basic band, 35.75% (upper rate) within the higher band, and 39.35% (additional rate) above £125,140. These rates are lower than the equivalent rates on salary because dividends are paid out of company profit that has already borne Corporation Tax. The calculator uses England, Wales and Northern Ireland thresholds; dividend rates themselves are UK-wide.

Dividend tax = (basic-band dividends − £500) × 10.75%
             + higher-band dividends × 35.75%
             + additional-band dividends × 39.35%

where dividends are stacked on top of (salary − personal allowance)
Net dividends = Gross dividends − Dividend tax

Worked example

Take a company director on a £12,570 salary who draws £50,000 of dividends in 2026/27 (England), with no other income, pension or student loan:

The total dividend tax is £8,396.25, leaving net dividends of £41,603.75. That is an effective dividend tax rate of 16.79% (£8,396.25 ÷ £50,000), even though £12,300 of the dividends were taxed at the 35.75% higher rate — because the first £37,700 sat in the 10.75% band and £500 was tax-free.

When your result may differ

Your actual bill can differ from this estimate. If your total income tops £100,000, your personal allowance tapers away and more of your dividends are pushed into higher bands — the squeeze is sharpest between £100,000 and £125,140. A larger salary or other income (rent, savings interest, pension) fills the tax bands before your dividends, so the same dividends can be taxed at a higher rate; with a £50,270 salary, every pound of dividend is already in the 35.75% band. Scottish taxpayers pay Scotland's own Income Tax rates on salary, but dividend tax is reserved to the UK, so the dividend figure here is unchanged north of the border. Dividends held inside a Stocks and Shares ISA or a pension are tax-free and should be excluded entirely. Finally, this tool assumes the standard personal allowance and a single tax year; a non-standard tax code, the marriage allowance, or dividends spanning two tax years will change the result.

Rates and thresholds

UK dividend tax — 2026/27 tax year. Rates are the same across England, Scotland, Wales and Northern Ireland.

Sources & legal basis

Update log

• 2026-06-04 — Initial 2026/27 setup with the £500 dividend allowance.
• 2026-06-15 — Added worked example, rates table and source table; expanded the explanation of how dividends stack on top of salary and the £500 allowance.
• 2026-07-14 — Updated to the current gov.uk 2026/27 dividend rates: 10.75% ordinary, 35.75% higher and 39.35% additional; re-derived the £50,000 dividend worked example.