Limited company
Dividend tax calculator for 2026/27
Dividends sit on top of your other income, so the same payment can be taxed at three different rates depending on what else you earn.
A director who takes a £12,570 salary and £30,000 of dividends in 2026/27 owes £3,171 of dividend tax and nothing on the salary. The salary uses the Personal Allowance, the first £500 of dividends falls in the dividend allowance at 0 %, and the remaining £29,500 is taxed at the ordinary rate of 10.75 %. From 6 April 2026 the three dividend rates are 10.75 %, 35.75 % and 39.35 %, applied according to the band the dividends land in once they are stacked on top of salary, trading profit, pension and rent. Two points catch people out: the £500 allowance is not an extra band, it uses the same band space as the dividends it covers; and a Scottish taxpayer pays the same dividend tax as everyone else in the UK, using the UK band limits, whatever rate applies to their salary.
Dividend tax, 2026/27
Tax on your dividends
£3,171
| At 10.8 % | £3,171 |
| At 35.8 % | £0 |
| At 39.4 % | £0 |
| Tax on the salary | £0 |
Figures checked by Radif Partners · Editorial policy · How we calculate
Six people, six dividend bills
Each row stacks the dividends on top of the other income shown, then splits them between the rate bands. The amounts under each rate are the slices of dividend taxed there; the £500 allowance and any unused Personal Allowance make up the difference.
| Who | Other income | Dividends | At 10.75 % | At 35.75 % | At 39.35 % | Dividend tax |
|---|---|---|---|---|---|---|
| No other income | £0 | £20,000 | £6,930 | £0 | £0 | £745 |
| Director, typical salary | £12,570 | £30,000 | £29,500 | £0 | £0 | £3,171 |
| Director, larger draw | £12,570 | £50,000 | £37,200 | £12,300 | £0 | £8,396 |
| Employee with shares | £30,000 | £10,000 | £9,500 | £0 | £0 | £1,021 |
| Higher rate employee | £60,000 | £20,000 | £0 | £19,500 | £0 | £6,971 |
| Allowance tapered | £100,000 | £30,000 | £0 | £24,640 | £4,860 | £10,721 |
The employee on £60,000 pays the higher dividend rate on all but the first £500, because the salary has already used the basic rate band. The last row shows the additional rate at work: with £130,000 of total income the Personal Allowance has gone, and £4,860 of the dividends sits above the additional rate threshold.
The allowance uses band space
A company director on a £12,570 salary has £37,700 of basic rate band left for dividends. Paying £38,200 of dividends, £500 more than that, does not buy an extra £500 at 0 % on top: the allowance sits at the bottom of the dividends, inside the band, and £500 ends up taxed at 35.75 % (£179 of tax). GOV.UK’s own worked example on tax on dividends sets out the same order: wages first, then the allowance, then the taxable dividends.
Scotland uses the UK bands for dividends
Scottish Income Tax has 6 bands and a higher rate from £43,663, but it covers only non-savings, non-dividend income. A Scottish director’s dividends are taxed exactly as in Cardiff or Belfast, with the ordinary dividend rate running to £50,270 of total income. That is why the dividend calculator asks where you live only to work out the tax on the other income.
Paying and reporting
Nothing is deducted when a company pays a dividend. If you already file a Self Assessment return, the dividends go on it, and the tax is due by 31 January after the end of the tax year, often with payments on account as well. If you do not, smaller amounts can be collected by changing your tax code; larger ones require a return, and you must tell HMRC by 5 October after the tax year in which you received them. Dividends from shares held in an ISA are not taxed at all. To set dividends against a salary for a director, the salary and dividends calculator finds the combination that leaves the most.