UK Dividend Tax Calculator

After a £500 tax-free dividend allowance, dividends are taxed at 8.75% if they fall in the basic-rate band, 33.75% in the higher-rate band and 39.35% in the additional-rate band. Dividends are treated as the top slice of your income, so your other income determines which bands they fall into.

£500. The first £500 of dividend income each year is tax-free, regardless of your tax band. This allowance has fallen sharply in recent years (from £2,000), so more dividend income is now taxable than before.

For 2025/26 the dividend rates are 8.75% (basic rate), 33.75% (higher rate) and 39.35% (additional rate). These are lower than the equivalent rates on salary, which is one reason company directors often take income as dividends.

Dividends are taxed as the top part of your income. Your non-dividend income (salary, rent, etc.) is counted first and uses up your personal allowance and basic-rate band; the dividends then sit on top, falling into whichever bands remain. This calculator does that stacking for you.

Yes. Your £12,570 personal allowance applies to your total income, including dividends. It is generally set against your other income first; any unused allowance can then cover dividends. The allowance is tapered away for incomes over £100,000 and is lost entirely at £125,140.

If your total income exceeds £100,000, your £12,570 personal allowance is reduced by £1 for every £2 of income above £100,000, disappearing completely at £125,140. This calculator applies the taper automatically, which can push more of your dividends into higher bands.

At minimum the £500 dividend allowance. If you have unused personal allowance (for example, low other income), some dividends can also be covered by that, so the total tax-free amount can be higher. The calculator shows the tax-free portion in your result.

After. Dividends are always treated as the highest part of your income, taxed after your salary and other income. This matters because it determines whether your dividends fall in the basic, higher or additional band.

Often, because dividend rates (8.75%/33.75%/39.35%) are lower than the income-tax rates on salary, and dividends do not attract National Insurance. However, dividends are paid from post-corporation-tax profits, so the overall picture depends on corporation tax too. Many directors use a salary-plus-dividend mix.

No. Dividends are not subject to National Insurance, unlike salary. This is a key reason owner-directors often take part of their income as dividends, though the company has already paid corporation tax on the underlying profits.

If your dividends exceed the £500 allowance you generally report them through Self Assessment and pay the tax via your tax return. In some cases small amounts can be collected through your PAYE tax code. The calculator estimates the tax due so you can plan for it.

No. Dividends on shares held inside a Stocks & Shares ISA are completely tax-free and do not count towards your dividend allowance. This calculator is for dividends held outside an ISA. (Note: US citizens should be aware ISAs are not tax-free for US purposes.)

Dividend tax rates and the dividend allowance are set UK-wide and are the same in Scotland — so this calculator applies there too. Scotland sets its own rates only for non-savings, non-dividend income (like salary), not for dividends.

£125,140 of total income for 2025/26. Income above this is taxed at the additional rate, and dividends in this band are taxed at 39.35%. The personal allowance is fully tapered away by this point.

UK residents are generally taxable on worldwide dividends, including from foreign companies, at the same UK dividend rates, with foreign tax credit relief for any overseas withholding tax. Foreign dividends can have extra reporting, so this calculator is best for UK-company dividends; complex foreign holdings should be checked.

You face both systems: the UK taxes the dividends at the rates above, and the US also taxes you as a citizen on worldwide income. The US/UK treaty and the Foreign Tax Credit prevent double taxation, but UK dividends can interact with US rules (including PFICs for fund holdings), so cross-border investors should get specialist advice.

It uses the 2025/26 £500 dividend allowance, the 8.75%/33.75%/39.35% rates, the £12,570 personal allowance with the £100k taper, and the £37,700 basic-rate band, so it is accurate for typical cases. It assumes standard England/Wales/NI bands and does not model every relief or the blind person's allowance.

The dividend allowance was cut from £2,000 to £1,000 and then to £500, and dividend rates were increased, so more dividend income is now taxable and at higher rates. For investors and directors this has made dividend planning more important.

The calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

Yes. Enter your name and email (phone and address optional) and we generate a TaxStone-branded PDF of your dividend tax breakdown to download instantly — useful for planning director remuneration or sharing with your accountant.

For company directors and investors — especially anyone with US/UK exposure — the salary-versus-dividend mix, allowances and cross-border treatment can save real tax. Book a free 20-minute call with a TaxStone adviser.