Dividend tax calculator
Work out the tax on your dividends after the £500 dividend allowance and any Personal Allowance your salary leaves unused. Enter your salary and other income too, because dividends are taxed on top of it. It works for Scottish taxpayers, whose salary is taxed on Scottish bands while their dividends use UK ones.
How you pay it
Your allowances
Your Personal Allowance goes against your salary first. Whatever is left covers your dividends.
Your income tax
No National Insurance is charged on dividends. National Insurance on a salary is on the take-home pay calculator.
Which bands your dividends land in
Dividends stack on top of your other income on the UK bands. The allowance row is taxed at 0% but still uses up its band.
| Band | Rate | Dividends | Tax |
|---|
Your salary and your dividends are taxed on different bands
The top of your salary is taxed at 0% under Scottish rates. Your dividends are taxed at UK rates, starting from where your salary sits on the UK bands, so they start at 0%. The dividend figure is the same as it would be anywhere else in the UK.
This covers UK dividends outside an ISA or a pension. It does not include savings interest, pension contributions or Gift Aid that extend your basic rate band, foreign dividends, or the corporation tax your company pays before it can pay a dividend. Dividends also count towards the £100,000 limits for the High Income Child Benefit Charge and childcare support, which this calculator does not work out.
Related calculators
UK Income Tax
Basic, higher and additional rate for England, Wales & NI, with National Insurance and dividend tax.
OpenScottish Income Tax
All six Scottish bands from starter to top rate, with National Insurance and dividend tax.
OpenSelf-employed tax
Your Self Assessment bill as a sole trader, split into what you owe on 31 January and 31 July.
OpenHow this is calculated
- We add your dividends to your salary and other income. That total sets your Personal Allowance, the amount you can receive before paying any tax, which shrinks by £1 for every £2 you have above £100,000.
- We set your Personal Allowance against your salary and other income first. Anything left over covers your dividends.
- We work out the tax on your salary and other income at Scottish or UK rates, depending on where you live.
- We place your dividends on top of that income on the UK band ladder. Dividends always use UK rates and UK bands, including in Scotland.
- The first £500 of dividends is taxed at 0%. It still takes up room in whichever band it lands in, so it can push the rest of your dividends into a higher band.
- The rest is taxed at 10.75% up to £50,270 of total income, 35.75% up to £125,140 of taxable income, and 39.35% above that.
- We run the same figures at the previous tax year's rates, so you can see what this year's rates cost you.
Frequently asked questions
How much tax do I pay on dividends in 2026/27?
The first £500 is tax-free. Above that you pay 10.75% on dividends in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. Your salary and other income fill the bands first, so the rate on your dividends depends on your total income.
Did dividend tax go up in April 2026?
Yes. The basic and higher dividend rates each rose by 2 percentage points on 6 April 2026, from 8.75% to 10.75% and from 33.75% to 35.75%. The additional rate stayed at 39.35% and the £500 allowance did not change.
Do Scottish taxpayers pay a different rate on dividends?
No. Dividends are taxed at UK rates wherever you live. Your salary is still taxed at Scottish rates, and it uses up the UK basic rate band first. A Scottish taxpayer on £45,000 pays 42% on the top of their salary but 10.75% on their next £5,270 of dividends.
Does the £500 dividend allowance use up my basic rate band?
Yes. Dividends covered by the allowance are taxed at 0%, but they still count towards your basic or higher rate band. That can push the rest of your dividends into a higher band than you expect.
Do I need to fill in a tax return for dividends?
Only if your dividends are over £10,000, or you already file one. Between £500 and £10,000 you can ask HMRC to collect the tax through your tax code instead. Dividends inside an ISA or a pension are tax-free and you don't report them.
Can I use my Personal Allowance against dividends?
Yes, if your salary and other income don't use all of it. A director on a £5,000 salary has £7,570 of Personal Allowance left, which covers that much of their dividends before the £500 dividend allowance starts.
Dividends are money you choose when to take. This is a level-headed read on what to do with income you control the timing of.
As an Amazon Associate I earn from qualifying purchases.
This calculator is for general guidance only. It does not replace advice from an accountant who works with company directors on your personal circumstances.
Last updated: