Dividend Tax Calculator

🇬🇧 Free Tool · 2026/27 Tax Year
Dividend Tax Calculator: what you'll pay on dividends in 2026/27
Dividend tax went up 2p in the pound this April. Enter your salary and dividends to see your bill at the new 10.75% / 35.75% / 39.35% rates — with the £500 allowance and personal allowance applied correctly.
Tax-free (allowances)–
Taxed at 10.75% (basic)–
Taxed at 35.75% (higher)–
Taxed at 39.35% (additional)–
Income tax on salary–

2026/27 dividend tax rates — the April increase

Band Total income range 2025/26 rate 2026/27 rate
Dividend allowance First £500 of dividends 0% 0%
Basic rate Up to £50,270 8.75% 10.75%
Higher rate £50,271 – £125,140 33.75% 35.75%
Additional rate Over £125,140 39.35% 39.35%

The Autumn Budget 2025 added 2 percentage points to the basic and higher dividend rates from 6 April 2026. Combined with the allowance stuck at just £500 (it was £5,000 as recently as 2017/18), directors and investors are paying dividend tax on almost everything they draw. Dividends still escape National Insurance entirely, which is why salary-plus-dividends remains the standard director strategy — the maths has just tightened.

How the calculation works

Dividends are taxed last, stacked on top of your other income. Any unused personal allowance (£12,570) shelters dividends first; the next £500 is covered by the dividend allowance; the rest is taxed at the rate of whichever band it lands in. Dividends held inside an ISA or pension are completely tax-free and don't belong in this calculator. If you received over £10,000 in dividends, HMRC requires a Self Assessment return.

Frequently asked questions

How much dividend can I take tax-free in 2026/27?

£500 via the dividend allowance — plus any unused personal allowance. A director with a £12,570 salary and no other income pays tax on dividends above £500.

Did dividend tax go up in 2026?

Yes — from 6 April 2026 the basic rate rose from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. The additional rate stays at 39.35%.

Do I pay National Insurance on dividends?

No — dividends carry no NI at all, which is the core reason the low-salary-plus-dividends approach still beats a large salary for most director-shareholders.

When do I report dividends to HMRC?

Dividends over £500 generally go on a Self Assessment return (mandatory over £10,000), due 31 January after the tax year ends. Smaller amounts can sometimes be handled through your tax code.

Are ISA dividends taxable?

No — dividends on investments held in an ISA or pension are entirely tax-free and don't count towards any allowance or band.

Draw dividends the smart way

FincSol Accountancy plans the optimal salary–dividend mix for directors, prepares the paperwork, and files your Self Assessment — so the April rate rise costs you as little as possible. Dedicated personal accountant. No long-term contract.

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Uses 2026/27 rates for England, Wales & NI, including personal-allowance taper above £100,000. Excludes Scottish rates on non-dividend income and student loans. Guidance only — see gov.uk. Related: limited company vs sole trader · salary calculator · Self Assessment service.