UK Dividend Tax Calculator 2026/27 — Free Dividend Tax Estimate

Dividend Tax Calculator

Adjust figures — results update instantly.

Tax year 2026/27

Annual salary / other income

Dividend income (annual)

Pension contributions (annual)

Reduces taxable non-dividend income.

Total div tax

£1,021

Net dividends

£8,979

Effective rate

10.2%

Tax-free dividends £500

At 10.75% basic £9,500

At 35.75% higher £0

At 39.35% additional £0

Tax calculation

Item	Amount
Total salary / other income	£40,000
Dividend income	£10,000
Personal Allowance used	£12,570
Dividend allowance	£500
Taxable dividends	£9,500
Dividends at basic rate	£9,500
Dividends at higher rate	£0
Dividends at additional rate	£0

Dividend tax

Item	Amount
Tax at 10.75%	£1,021
Tax at 35.75%	£0
Tax at 39.35%	£0
Total dividend tax	£1,021
Net dividend income	£8,979

Tax year 2026/27 · Dividend allowance £500 · Basic rate 10.75% · Higher rate 35.75% · Additional rate 39.35% · Personal Allowance £12,570 · Estimates only — not financial or tax advice.

How it works

Three steps to estimate your dividend tax

Enter salary and dividends

Add your annual salary or other income and total dividend income for the tax year. Include any pension contributions to reduce your taxable income.

Dividends sit on top of other income

Your salary fills the Personal Allowance and tax bands first. Dividends then sit on top — so a higher salary means more dividends are taxed at higher rates.

See tax at each band

Review dividend tax at 10.75%, 35.75% and 39.35%, the £500 allowance used, net dividend income after tax, and effective dividend tax rate.

Worked example

£40,000 salary and £10,000 dividends

The salary of £40,000 uses most of the Personal Allowance and basic-rate band. Taxable salary: £40,000 − £12,570 = £27,430. This uses £27,430 of the £37,700 basic-rate band, leaving £10,270 unused.

After the £500 dividend allowance, taxable dividends are £9,500. All £9,500 falls within the remaining £10,270 of the basic-rate band. Dividend tax = 10.75% × £9,500 = approximately £1,021.

Net dividend income after tax: approximately £8,979. Effective dividend tax rate: approximately 10.2%. If salary were £55,000 instead, dividends would fall into the higher-rate band at 35.75%. Try adjusting the salary figure above.

FAQ

Dividend tax — common questions

What is the dividend allowance for 2026/27?

The dividend allowance is £500 for 2026/27. Dividends within this amount are free from dividend tax, regardless of which tax band you are in. This £500 sits on top of your Personal Allowance.

What are the dividend tax rates for 2026/27?

The dividend tax rates for 2026/27 are 10.75% in the basic-rate band (income up to £50,270), 35.75% in the higher-rate band (£50,271–£125,140), and 39.35% in the additional-rate band (above £125,140). These rates have applied since April 2023.

Are dividends from ISAs taxed?

No. Dividends received within a Stocks and Shares ISA are completely free from UK income tax and dividend tax. Only dividends paid outside an ISA count towards your dividend allowance and are subject to dividend tax.

Why does my salary affect my dividend tax rate?

Dividends are treated as the top slice of your income. Your salary and other non-dividend income fill the Personal Allowance and the basic-rate band first. Dividends then sit on top, so a higher salary pushes more dividends into higher tax bands. This is why the calculator asks for your salary.

Do I need to complete a Self Assessment for dividend income?

You must register for Self Assessment if your dividend income exceeds £1,000 in a tax year (or £500 if you are already required to file). HMRC cannot automatically collect dividend tax through PAYE, so you must declare it yourself.

Is corporation tax separate from dividend tax?

Yes. Corporation tax is paid by the company on its profits before any dividends are paid. When a dividend is then paid to a shareholder, dividend tax is calculated on the shareholder's personal income. This calculator covers only the personal dividend tax — not corporation tax on profits.

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Three more tools in the same network

UKDividendTaxCalculator is part of the UK Money Calculators network — free, independent tools for estimating UK tax and finances.

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Methodology

How we calculate dividend tax

Salary and other non-dividend income fills the Personal Allowance first, then the basic-rate band. Dividends sit on top. After the £500 dividend allowance, taxable dividends are split across the remaining basic-rate band (10.75%), higher-rate band (35.75%) and additional-rate band (39.35%). The Personal Allowance tapers to zero above £125,140 of total income.

This calculator does not cover corporation tax on company profits, ISA dividends (which are tax-free), Scotland-specific income tax rates (dividend rates are the same UK-wide), or trust income.

Read full methodology →