Dividend Tax Calculator (UK)
Work out the tax on your dividends for 2026/27. The first £500 is tax-free, then you pay 10.75%, 35.75% or 39.35% depending on your Income Tax band. Model it in our calculator.
Dividend Tax Rates 2026/27
Dividends sit on top of your other income, so the rate follows your highest band.
| Band | Dividend tax rate |
|---|---|
| First £500 | 0% (dividend allowance) |
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
Dividend Tax Tips
- Use your allowance: the £500 is per person, per year — spouses can each use it.
- Pension contributions: can pull you out of the higher band, cutting dividend tax.
- Directors: a low salary + dividends mix is common but plan for the higher-rate hit above £50,270.
Frequently asked questions
What is the dividend allowance for 2026/27?
The first £500 of dividends each tax year is tax-free (the dividend allowance). Dividends above that are taxed at 10.75% (basic), 35.75% (higher) or 39.35% (additional), depending on your Income Tax band.
Do dividends use my Personal Allowance?
Yes. Dividends are treated as the top slice of your income, so they sit above your salary and Personal Allowance. The tax rate that applies depends on your overall taxable income band.
How do I pay dividend tax?
Most people report dividends through Self Assessment and pay via the annual return. If you're an employee with small dividend income, HMRC may collect it through your tax code instead.