Dividend Tax Calculator (2026/27)
Dividend tax rates went up by 2 percentage points in April 2026 — many older calculators still show the previous rates. Enter your salary and dividend income to see your dividend tax bill using the confirmed 2026/27 rates: 10.75%, 35.75% and 39.35%.
How it works
Dividends sit on top of your other income. Your salary uses up your Personal Allowance and tax bands first; your dividends are then taxed in whichever band they land — 10.75% in the basic band (taxable income up to £37,700), 35.75% in the higher band, and 39.35% in the additional band.
The first £500 of dividends is covered by the dividend allowance, so it is tax-free — but it still occupies space in your tax band, which matters if your dividends straddle a band boundary.
From 6 April 2026, the ordinary rate rose from 8.75% to 10.75% and the upper rate from 33.75% to 35.75% (announced at Autumn Budget 2025). The additional rate stays at 39.35%. If a calculator shows 8.75%, it is out of date.
FAQ
What are the dividend tax rates for 2026/27?
From 6 April 2026: 10.75% at the basic rate, 35.75% at the higher rate, and 39.35% at the additional rate. The first two rose by 2 percentage points at Autumn Budget 2025 — check any figure you see elsewhere against gov.uk, as many pages still show the old 8.75%/33.75% rates.
How much dividend income is tax-free?
The dividend allowance is £500 for 2026/27. Dividends within your unused Personal Allowance are also tax-free. So a person with no other income could receive £13,070 in dividends (£12,570 PA + £500 allowance) before paying any dividend tax.
Do I need to file a tax return for my dividends?
If your dividend income is over £500 (the allowance) but under £10,000, you can ask HMRC to adjust your tax code or declare it via Self Assessment. Over £10,000, a Self Assessment return is required. Dividends inside an ISA are entirely tax-free and never need reporting.
Is salary or dividend better for a limited company director in 2026/27?
The 2-point rate rise narrowed the gap, but a small salary plus dividends usually still beats full salary because dividends avoid National Insurance. The best split depends on company profits and your other income — this calculator shows the dividend tax side of that comparison.