Dividend Tax Calculator 2026/27
Last updated: 09 September 2026 · 2026/27 UK tax year
The 2026/27 dividend tax rates are 8.75% (basic), 33.75% (higher), and 39.35% (additional). Use our calculator to model exactly how dividends stack on top of your salary.
Income Details
Enter your gross PAYE salary, pension, or other non-dividend income.
Dividends sit on top of your other income for tax purposes.
Dividend Tax Owed (2026/27)
£0.00
Effective Tax Rate: 0.0%
Tax Breakdown:
Dividend Tax Rates 2026/27
Dividend income is taxed at lower rates than salary, which is why dividends are a tax-efficient way to extract profits from a limited company. The 2026/27 rates are unchanged from the previous year:
- Basic rate: 8.75%
- Higher rate: 33.75%
- Additional rate: 39.35%
How Are Dividends Taxed in the UK?
Unlike regular salary, you do not pay National Insurance on dividend income. This makes dividends a highly tax-efficient way to extract money from a limited company, even after the April 2026 rate increases.
The £500 Dividend Allowance
Everyone gets a tax-free Dividend Allowance of £500. This means the first £500 of dividend income you earn each year is taxed at 0%. This allowance is available regardless of whether you are a basic, higher, or additional rate taxpayer.
How Dividends Stack on Top of Your Salary
For tax purposes, dividends are treated as the "top slice" of your income. Your salary, pension, and rental income use up your £12,570 Personal Allowance and your basic rate tax band first. Your dividends then sit on top of this. For example, if your salary uses up your entire basic rate band, all of your dividends (above the £500 allowance) will be pushed into the 35.75% higher rate bracket. You can model this using our Take-Home Pay Calculator.
How the April 2026 Rate Rise Affects Company Directors
Many company directors extract profits via a small salary and high dividends. The 2% hike across the basic and higher rates means you will need to pay hundreds (or thousands) of pounds more in tax this year. If you are operating via a limited company, you should also check whether your contracts fall inside or outside the IR35 rules using our IR35 Calculator.
Do I Need to Declare Dividends on Self Assessment?
If your total dividend income is strictly under the £500 allowance, you do not need to do anything. If it is over £10,000, you are legally required to register for Self Assessment and file a tax return. If your dividend tax bill triggers payments on account, you will need to pay half of next year's estimated bill in advance. You can forecast this using our Payment on Account Calculator.
Dividend Taxation