Dividend Tax Calculator 2026/27
Calculate the tax you'll pay on dividend income from shares, investments or your own limited company.
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Results are estimates only and do not constitute financial advice.
Dividend tax examples — 2026/27 (assuming £12,570 salary)
Based on standard allowances with no pension contributions. Click any row to load it into the calculator above.
| Dividends | Dividend tax | Effective rate | Take-home |
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How it's calculated
The first £500 dividend allowance is always tax-free, regardless of your tax band. This applies on top of any unused personal allowance.
Dividends are treated as the top slice of income — they stack on top of your salary when determining which tax band they fall into. Your salary uses the personal allowance and lower bands first, and dividends fill whatever space remains.
Dividend tax rates are lower than equivalent income tax rates: 8.75% in the basic rate band, 33.75% in the higher rate band, and 39.35% in the additional rate band.
This lower taxation makes paying yourself through dividends (as a limited company director) more tax-efficient than taking an equivalent salary, though this must be balanced against corporation tax paid by the company.
Frequently asked questions
For 2026/27 the first £500 of dividend income is tax-free. It was £2,000 in 2022/23 and has been cut significantly since then. This applies regardless of your tax band.
Dividends above the £500 allowance are taxed at 8.75% (basic rate), 33.75% (higher rate) or 39.35% (additional rate). These are lower than equivalent income tax rates, making dividends tax-efficient.
If your dividends exceed £500, you must register for Self Assessment and file a return. HMRC may also adjust your tax code if they know about your dividends.
This calculator covers dividends from UK companies. The first £500 of dividend income each year is tax-free (the dividend allowance). Dividends are taxed at special lower rates, separate from income tax on salary.