Dividend tax calculator
On a £12,570 salary, £50,000 of dividends costs £8,396.25 in personal tax for 2026/27, £990 more than in 2025/26. Change the salary and dividends to see how much of each band you use and what each slice costs.
Rates for the 2026/27 tax year. Checked 7 November 2026.
| Salary | £12,570.00 |
|---|---|
| Dividends | £50,000.00 |
| Total income | £62,570.00 |
| Personal allowance £12,570 against salary and other income, £0 against dividends | £12,570.00 |
| Income tax on salary and other income | − £0.00 |
| Dividend allowance at 0% on £500 | − £0.00 |
| Dividend tax at 10.75% on £37,200 Basic rate | − £3,999.00 |
| Dividend tax at 35.75% on £12,300 Higher rate | − £4,397.25 |
| Employee National Insurance on salary | − £0.00 |
| Total personal tax | £8,396.25 |
| Left after tax | £54,173.75 |
| Tax on the next £1 of dividend | 35.75% |
|---|---|
| Effective rate on all income | 13.4% |
| High Income Child Benefit Charge Adjusted net income £62,570 against £60,000 | Applies if you claim |
| Personal allowance taper Starts at £100,000 of adjusted net income | No |
England, Wales and Northern Ireland. Scottish income tax bands are not supported yet, though dividend tax is the same across the UK. If tax is not all taken through payroll you will need a Self Assessment return.
Worked example: £12,570 salary and £50,000 of dividends
The salary uses the whole £12,570 personal allowance, so there is no income tax on it, and no employee NI because it sits at the primary threshold. The dividends then start at the bottom of the basic rate band.
The first £500 is covered by the dividend allowance. The next £37,200 fills the rest of the basic rate band at 10.75%, which is £3,999. The last £12,300 is taxed at 35.75%, which is £4,397.25. Total personal tax is £8,396.25, or 13.4% of your £62,570 income, and you keep £54,173.75, about £4,514 a month.
The same figures in 2025/26 cost £7,406.25, so the April 2026 rise adds £990. Your adjusted net income of £62,570 is over £60,000, so the child benefit charge applies if you or your partner claim it.
Why the result moves
- Once salary and dividends together pass £50,270, each extra pound of dividend is taxed at 35.75% instead of 10.75%.
- A higher salary uses more of the basic rate band, which leaves less room for dividends at 10.75%.
- Between £100,000 and £125,140 the personal allowance is withdrawn, so the tax on the next pound of dividend jumps.
- A personal pension contribution widens the basic rate band by the gross amount, so more dividends are taxed at 10.75%.
When this calculator is wrong for you
- You live in Scotland. Scottish bands apply to your salary, and they change how much of the UK band is left for dividends.
- You have savings interest. The starting rate for savings and the personal savings allowance are not modelled.
- You have capital gains. They are taxed separately and can share the same bands.
- You give to charity through Gift Aid. It extends your basic rate band like a pension contribution, which this calculator does not include.
Questions people ask
How much can I take in dividends tax free?
The dividend allowance is £500 in 2026/27. On top of that, any personal allowance your salary and other income do not use also covers dividends, so with no other income the first £13,070 of dividends is tax free. The £500 still uses up part of your basic rate band.
Do dividends attract National Insurance?
No. Employee and employer NI are charged on salary, not on dividends. That is the main reason limited company directors take a small salary and the rest as dividends.
How do dividends stack on top of salary?
Salary and other income use your personal allowance and tax bands first. Dividends are taxed as the top slice, so a £12,570 salary leaves the whole £37,700 basic rate band for dividends, while a £60,000 salary pushes every pound of dividend into the 35.75% band.
What changed in April 2026?
The basic and higher dividend rates each rose by 2 percentage points, to 10.75% and 35.75%. The additional rate stayed at 39.35%. Switch the tax year to 2025/26 to see the difference for your numbers.
When do I need to file a Self Assessment return?
If your dividends are over £10,000 in the tax year you must file. Between £500 and £10,000 you can ask HMRC to collect the tax through your tax code instead, or file a return. Directors are often asked to file anyway.
What is the £100,000 tax trap?
Once your adjusted net income passes £100,000, your personal allowance falls by £1 for every £2 over, and it is gone at £125,140. Dividends count towards that income, so the next pound of dividend can cost well over 50% in this range. Personal pension contributions reduce adjusted net income.
Do dividends count for the child benefit charge?
Yes. The High Income Child Benefit Charge looks at adjusted net income, which includes dividends. Above £60,000 you repay 1% of the benefit for every £200, and all of it at £80,000. The calculator flags when you are over £60,000 but does not work out the charge.
Do I repay my student loan on dividends?
Through Self Assessment, unearned income such as dividends counts only when it is over £2,000 in total. Once it is over, all of it counts, so £2,001 of dividends can add about £180 to a Plan 2 repayment.
How this is worked out
Total income is salary plus other income plus dividends. Adjusted net income is total income less the gross personal pension contribution, which is the amount you pay times 100/80. The personal allowance of £12,570 falls by £1 for every £2 of adjusted net income over £100,000. The allowance goes against salary and other income first, and anything left goes against dividends. The basic and higher rate limits of £37,700 and £125,140 are raised by the gross pension contribution. Salary and other income are taxed at 20%, 40% and 45% across those bands. Dividends sit on top: the first £500 is taxed at 0% but uses band space, then 10.75%, 35.75% and 39.35% for 2026/27 (8.75%, 33.75% and 39.35% for 2025/26). Employee NI is 8% of salary between £12,570 and £50,270 and 2% above. Student loans are 9% of income over the plan threshold and 6% over £21,000 for a postgraduate loan, with dividends counted only when they are over £2,000. The tax on the next £1 of dividend is the change in tax and loan repayment for £2 more dividend, divided by 2. Amounts are rounded to the penny for each band.
Full formulas, rounding rules and test cases are on the methodology page. Every rate update is listed in the changelog.