United Kingdom Tax year 2026/27
Rules checked against GOV.UK · updated 18 September 2026MethodologyReport a mistake
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Dividend tax calculator 2026/27

Work out dividend tax on a director's salary plus dividends, with the dividend allowance and every rate band set out in full.

What the company has paid or will pay you as dividends.
£500taxed at 0%
Where do you live?
Salary and dividends, after tax
£47,748.75
from £52,570 of salary and dividends, or £3,979.06 a month, after dividend tax
Dividend tax£4,821.25
Taken from the salary£0.00
Effective rate9.2%
The first £500 of dividends is taxed at 0%. After that the dividend rates apply, band by band, on top of your salary. They are lower than the income tax rates on pay, and dividends carry no National Insurance — those two together are why the same money costs less as a dividend than as salary. Nothing is deducted from that salary, because the first £12,570 a director earns in a year carries no charge.
How it adds up

Every step of your dividend tax

Worked calculationrules v2026.18 · annual basis
Salary from the company£12,570.00
Dividends£40,000.00
Total income£52,570.00
Personal Allowance−£12,570.00Used by the salary
Dividend allowance−£500.00Taxed at 0%
Basic rate 10.75% on £37,200.00£3,999.00Dividend tax
Higher rate 35.75% on £2,300.00£822.25Dividend tax
National Insurance£0.00None on dividends
What you keep£47,748.75
The rates

Dividend rates 2026/27

Basic rate10.75%
Higher rate35.75%
Additional rate39.35%
Rules v2026.18 · checked against GOV.UK on 18 September 2026Two independent checks on every rate · 393 of 418 hand-verified cases, all passing, beside 43,041 generated · How we calculate · Changelog
Payroll-grade
Questions

Common questions

How much tax will I pay on dividends in 2026/27?

On £12,570 of salary and £40,000 of dividends: the first £500 of dividends is taxed at 0% and the rest at the dividend rates, which comes to £4,821.25. With £0.00 of income tax and £0.00 of National Insurance on the salary, £47,748.75 is left.

Does the dividend allowance save me the higher rate?

Not on its own. The allowance is taxed at 0% but still uses up room in the band it falls in, so it pushes the rest of your dividends along rather than out of the band. It is worth the rate of the band it sits in, not the rate of your top band.

Why take a salary at all?

Dividends pay no National Insurance, which is why the dividend rates are lower than the income tax rates, but a salary is what builds a qualifying year for the State Pension and is a cost the company can set against its profits. A salary at the Personal Allowance of £12,570 is the common arrangement for that reason.

SourcesIncome Tax rates and allowances — GOV.UKIncome Tax rates and Personal Allowances — GOV.UK

MyNetIncome gives estimates, not tax or financial advice. Figures follow HMRC and Scottish Government rules for 2026/27; your payslip can differ because of your tax code, pay dates, benefits in kind or pension scheme. Not affiliated with or endorsed by HMRC. Contains public sector information licensed under the Open Government Licence v3.0.