Dividend Tax Calculator 2026/27
How much tax you pay on dividends from your limited company, at the rates that took effect on 6 April 2026 — with 2025/26 alongside so you can see what the rise costs you.
Calculate dividend tax
Your salary from your limited company. Taxed first — dividends sit on top.
Total dividends you plan to take in the tax year.
Other employment, pension or rental income. Taxed alongside your salary, below the dividends.
| Component | Amount |
|---|
| Component | Amount |
|---|
| Band | Taxable income the dividend slice falls in | 2026/27 | 2025/26 |
|---|---|---|---|
| Dividend allowance (nil rate) | first £500 of dividends, wherever it lands | 0% | 0% |
| Ordinary rate | up to £37,700 | 10.75% | 8.75% |
| Upper rate | £37,701 to £125,140 | 35.75% | 33.75% |
| Additional rate | over £125,140 | 39.35% | 39.35% |
This is the detail most calculators get wrong, and it costs real money. The £500 dividend allowance does not come off your income before the bands are worked out. It is a nil-rate band: the first £500 of dividends is charged at 0%, but it still uses up £500 of whichever band it falls in. It does not create extra basic rate band, and it does not move the £100,000 or £125,140 thresholds.
The calculator above works the same way: allowance first as a nil-rate band, band consumed, then the rest of the dividends charged at 10.75%, 35.75% or 39.35% according to the band each slice actually falls in.
Assuming a £12,570 salary and no other income. Dividend tax only — income tax, NI and Corporation Tax are excluded.
| Dividends | 2026/27 dividend tax | 2025/26 dividend tax | Increase |
|---|---|---|---|
| £20,000 | £2,096.25 | £1,706.25 | £390.00 |
| £30,000 | £3,171.25 | £2,581.25 | £590.00 |
| £50,000 | £8,396.25 | £7,406.25 | £990.00 |
| £70,000 | £15,546.25 | £14,156.25 | £1,390.00 |
| £100,000 | £27,842.50 | £25,852.50 | £1,990.00 |
£500 for 2026/27, unchanged from 2025/26. It is a nil-rate band, not a deduction from your income: the first £500 of dividends is charged at 0%, but it still uses up £500 of whichever band it falls in. So it does not create extra basic rate band, and it does not move the £100,000 or £125,140 thresholds.
Ordinary (basic) rate 10.75%, upper (higher) rate 35.75%, additional rate 39.35%. The ordinary and upper rates each rose by 2 percentage points on 6 April 2026, from 8.75% and 33.75%. The additional rate did not change. The same rates apply across the whole UK, including Scotland — dividend tax is not devolved.
Two pence in the pound on every dividend taxed at the ordinary or upper rate. On a £12,570 salary plus £50,000 of dividends, dividend tax is £8,396.25 for 2026/27 against £7,406.25 for 2025/26 — £990 more, which is exactly 2% of the £49,500 of dividends left after the £500 nil-rate band. Switch the year toggle above to see it on your own numbers.
Yes. Dividends are the top slice of your income. Salary, pension and rental income are taxed first and use up your basic rate band, then dividends fill whatever is left before the upper and additional dividend rates bite. Dividends also count towards the £100,000 point at which the personal allowance starts to be withdrawn, £1 for every £2 over, and is gone entirely at £125,140.
No — there is no National Insurance on dividends, which is why a low salary plus dividends is usually cheaper than a large salary. But the company pays Corporation Tax on its profits before it can declare a dividend: 19% up to £50,000 of profits, 25% above £250,000, and an effective 26.5% on the slice in between under marginal relief.
Many contractors take a salary of £12,570 — that is both the personal allowance and the NIC primary threshold, so no income tax and no employee NIC — and the rest as dividends. The company still pays employer NIC at 15% on salary above the £5,000 secondary threshold, so whether a higher salary wins depends on whether your company can claim the £10,500 Employment Allowance. Ask your accountant before you fix a salary.
How dividend tax is worked out
Dividends are paid out of company profits that have already suffered Corporation Tax, and they carry no National Insurance. What they do carry is their own set of income tax rates, which sit on top of everything else you earn.
The order of the calculation
- Add up your income. Your personal allowance is £12,570, reduced by £1 for every £2 of total income above £100,000 and gone at £125,140 — and dividends count towards that £100,000.
- Set the personal allowance against salary and other non-dividend income first; any unused part covers dividends.
- Tax the non-dividend income bottom-up: 20% on the first £37,700 of taxable income, 40% to £125,140, 45% above.
- Stack the dividends on whatever band is left. The £500 nil-rate band goes first at 0% and uses up band, then 10.75%, 35.75% and 39.35% apply by band.
Salary, NI and the numbers this tool uses
Employee National Insurance is charged on salary only: nothing to £12,570, 8% from £12,570 to £50,270, and 2% above. This calculator applies those thresholds on an annual basis, which is how a director's NIC is worked out — a director has an annual earnings period however often they are paid.
If you are a Scottish taxpayer
Dividend tax is not devolved, so the 10.75% / 35.75% / 39.35% rates are the same for you. Scotland's own rates and bands apply to your salary instead, so the salary side of this calculator will not match a Scottish payslip.
Taking money out as a loan instead
If you draw money from the company that is neither salary nor a properly declared dividend, it becomes a director's loan. The s455 charge on an overdrawn loan account followed the dividend upper rate up: 35.75% for loans made on or after 6 April 2026, with older loans keeping 33.75% — the rate follows the date of the loan, not the accounting period.
Cross-check anything material against GOV.UK: tax on dividends, and see the rest of the ContractorUK calculators for the salary and Corporation Tax side of the same decision.
This calculator provides arithmetic calculations only, on the figures you enter, and ignores student loan repayments, pension contributions, salary sacrifice, the marriage allowance and anything else specific to you. Verify with HMRC guidance or a qualified accountant before acting on it.