Dividend tax calculator
See how much dividend tax you'll pay for 2026/27, once your dividends stack on top of your other income.
Your dividend tax estimate
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Assumes dividends stack on top of your other income. Ignores Scottish income tax bands, which do not apply to dividends anyway. Always take advice before acting.
How it works
Dividends are taxed after your other income has used up your personal allowance and tax bands. The first £500 of dividends is tax-free every year (the dividend allowance), then the rest is taxed at 10.75%, 35.75% or 39.35% depending on which band it falls into. The personal allowance also tapers away once your total income passes £100,000, which this calculator accounts for automatically. Deciding how much to draw as dividends versus salary is a core part of our limited company accounts service.
Frequently asked questions
Do dividends use my personal allowance first?
Your other income, such as salary, uses your personal allowance and tax bands first. Dividends are then taxed on top, in whichever bands remain.
Is the dividend allowance the same as the personal allowance?
No. The dividend allowance is a separate £500 tax-free amount for dividend income specifically, on top of your personal allowance.
Why does my effective rate look lower than my income tax rate?
Dividend tax rates are lower than income tax rates at every band, and dividends carry no National Insurance, which is why many directors prefer them to salary above a certain point, as covered in our tax-efficient salary guide.
What if my income is over £100,000?
Above £100,000 of total income, your personal allowance reduces by £1 for every £2 over the threshold, which can push more of your income, including dividends, into higher bands. This calculator applies that taper.
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These results are a simplified illustration based on 2026/27 rates, not advice. Your real position depends on your full circumstances. For a personalised answer, book a free consultation.
Numbers looking complicated?
A calculator gives you an estimate. A free call gives you a plan. Book one and we'll work through your actual situation.