🧾Dividend Tax Calculator (UK)

About this tool

Enter your salary and any other non-dividend income, plus your dividends for the tax year. The calculator stacks the dividends on top, applies the personal allowance and the £500 dividend allowance, and shows the tax in each band with your effective rate. It suits investors and limited company directors.

How dividends are taxed in the UK

Dividends are taxed differently from salary. They're treated as the top slice of your income, so your salary, pension and other income use up the personal allowance and the tax bands first, and dividends sit above them. The first £500 of dividends is covered by the dividend allowance. It's tax-free, but it still takes up space in whichever band it falls in. Dividends above that are taxed at 8.75% in the basic rate band, 33.75% in the higher rate band and 39.35% above £125,140. These rates are the same across the UK, including Scotland. For example, a £30,000 salary plus £10,000 of dividends keeps everything inside the basic rate band: £9,500 × 8.75% = £831.25. With a £60,000 salary, the same dividends are all higher-rate, at £3,206.25. Directors of their own companies often take a salary around the personal allowance or the National Insurance threshold and the rest as dividends, because dividends carry no National Insurance. But they're paid from profit after corporation tax, so compare the total cost carefully. Honest limits: dividends inside ISAs and pensions are tax-free. If you receive more than £10,000 of dividends, you must file a Self Assessment return. Savings interest has its own starting rate and allowance, which aren't modelled here, and this isn't tax advice. The UK income tax calculator, the dividend calculator and the capital gains tax calculator are related.

Frequently asked questions