# Dividend Tax Calculator

> Work out the income tax on your dividends for 2026-27 or 2025-26, on top of your salary or other income, with the dividend allowance and each band shown.

Enter your salary or other income and your dividends to see the tax on the dividends, band by band.

Use the calculator: https://www.taxoptimiser.co.uk/calculators/dividend-tax

Example: On £40,000 of dividends with a salary of £12,570, the tax on the dividends for 2026-27 is £4,821.25, which is 12.05% of the dividends.

## How dividends are taxed

Dividends are treated as the top slice of your income. Any Personal Allowance left after your other income covers them first, then the first £500 is taxed at 0% under the dividend allowance. The rest is taxed at the dividend rate for the band it falls in.

## Dividend tax rates

For 2026-27 the rates are 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. For 2025-26 they were 8.75%, 33.75% and 39.35%.

## Scottish taxpayers

Scottish income tax rates apply to earnings and other non-savings income. Dividends are taxed at the UK dividend rates and bands wherever you live in the UK.

## Dividend tax rates

Dividends covered by unused Personal Allowance, and then by the dividend allowance, are taxed at 0%.

| Tax year | Dividend allowance | Basic rate band | Higher rate band | Additional rate band |
| --- | --- | --- | --- | --- |
| 2026-27 | £500 | 10.75% | 35.75% | 39.35% |
| 2025-26 | £500 | 8.75% | 33.75% | 39.35% |

## Dividend tax examples, 2026-27

Worked through this calculator for a taxpayer in England, Wales or Northern Ireland whose only other income is the amount shown.

| Salary or other income | Dividends | Tax on the dividends | Effective rate |
| --- | --- | --- | --- |
| £0 | £30,000 | £1,819.97 | 6.07% |
| £12,570 | £20,000 | £2,096.25 | 10.48% |
| £12,570 | £40,000 | £4,821.25 | 12.05% |
| £12,570 | £60,000 | £11,971.25 | 19.95% |
| £30,000 | £20,000 | £2,096.25 | 10.48% |
| £50,000 | £20,000 | £6,928.72 | 34.64% |

For £50,000 with £20,000 of dividends, the Personal Allowance is set against whichever income saves the most tax, as the law allows. Moving a little of it from the salary to the dividends lifts those dividends out of the higher rate band, so the figure is lower than taking the whole allowance off the salary first.

## Frequently asked questions

### How much dividend income is tax-free?

The dividend allowance is £500 for 2026-27. Dividends covered by any unused part of your £12,570 Personal Allowance are tax-free as well.

### What are the dividend tax rates?

For 2026-27: 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band.

### How much tax is due on £40,000 of dividends?

£4,821.25 for 2026-27 if your only other income is a salary of £12,570, which is 12.05% of the dividends.

### Are dividends taxed before or after my salary?

After. Dividends are treated as the top slice of your income, so your salary and other income use the Personal Allowance and the basic rate band first.

### Do dividends carry National Insurance?

No. National Insurance is charged on earnings and trading profits, not on dividends.

### Are dividends taxed differently in Scotland?

No. Scottish income tax rates apply to earnings and other non-savings income. Dividends are taxed at the UK dividend rates wherever you live in the UK.

## Related calculators

- [Salary vs Dividend Calculator](https://www.taxoptimiser.co.uk/calculators/salary-vs-dividend.md): Compare the standard director salary levels and see which leaves the most take-home pay.
- [Take-Home Pay Calculator](https://www.taxoptimiser.co.uk/calculators/take-home-pay.md): What is left of your salary after tax, National Insurance, pension and student loans.
- [Director's Loan (S455) Calculator](https://www.taxoptimiser.co.uk/calculators/directors-loan-s455.md): Section 455 tax on an overdrawn director's loan, with due and refund dates.
- [Corporation Tax Calculator](https://www.taxoptimiser.co.uk/calculators/corporation-tax.md): Estimate Corporation Tax for a UK limited company with marginal relief.

## Sources

- [Tax on dividends](https://www.gov.uk/tax-on-dividends) (GOV.UK)
- [Income Tax rates and Personal Allowances](https://www.gov.uk/income-tax-rates) (GOV.UK)
- [Scottish Income Tax](https://www.gov.uk/scottish-income-tax) (GOV.UK)

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Last updated 11 October 2026. Guidance only: a general estimate, not tax advice. Published by Tax Optimiser, UK tax filing software (https://www.taxoptimiser.co.uk).