Dividend tax calculator 2026/27
Dividends are taxed after your salary, using the bands that are left. From 6 April 2026 the ordinary and upper dividend rates rose by 2 percentage points. Enter your salary and dividends to see the bill.
Dividend tax rates
| Band | 2025/26 | 2026/27 |
|---|---|---|
| Dividend allowance | £500 at 0% | £500 at 0% |
| Basic rate band | 8.75% | 10.75% |
| Higher rate band | 33.75% | 35.75% |
| Additional rate band | 39.35% | 39.35% |
How it works
Your Personal Allowance is used against salary first. Dividends then fill whatever is left of the basic rate band, then the higher rate band. The £500 allowance is tax-free but still uses up part of the band, so it can push other dividends into a higher band.
Director salary and dividends
Many company directors take a salary of £12,570 (no income tax, and no employee National Insurance under £12,570) and the rest as dividends. Dividends are paid from profits after Corporation Tax (19% to 25%), so the total tax on a pound of profit is higher than the dividend rate alone suggests.
FAQ
Do Scottish taxpayers pay different dividend tax?
No. Dividends are taxed at UK rates for everyone, though the band they fall into depends on your other income.
Are dividends in an ISA taxed?
No. Dividends inside an ISA or pension are tax-free and do not use your allowance.
How do I pay dividend tax?
Under £10,000 of dividends you can ask HMRC to collect it through your tax code; above that, or if you are a company director, through Self Assessment.