UK Dividend Tax Calculator 2026/27 (10.75% Rate)

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Formula at a glance

UK Dividend Tax Calculator: Dividend tax — (dividends − £500 − unused allowance) × 10.75%, 35.75% or 39.35%. Example: £40,000 salary + £10,000 dividends → Dividend tax to pay: £1,021.25 — How the UK Dividend Tax Calculator works: Dividend tax — (dividends − £500 − unused allowance) × 10.75%, 35.75% or 39.35%

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📘 About the UK Dividend Tax Calculator 2026/27

Dividends are taxed after your salary and other income. The first £500 is covered by the dividend allowance; the rest is taxed at 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% above £125,140 — the basic and higher rates rose by 2 points from 6 April 2026.

Any unused personal allowance covers dividends first. Dividends from shares held in an ISA or a pension are tax-free. Scottish taxpayers use the same UK-wide dividend bands.

🧮 Formula

Dividend tax

(dividends − £500 − unused allowance) × 10.75%, 35.75% or 39.35%

✏️ Worked examples

£40,000 salary + £10,000 dividends

You enter
Salary and other income	40,000 £
Dividends for the year	10,000 £

You get
Dividend tax to pay	£1,021.25
Covered by personal allowance	£0
Dividend allowance used	£500
Effective rate on dividends	10.21%
Payment	Under £10,000 of dividends: HMRC can collect it through your tax code, or file Self Assessment

£1,021.25.

Director: £12,570 salary + £40,000 dividends

You enter
Salary and other income	12,570 £
Dividends for the year	40,000 £

You get
Dividend tax to pay	£4,821.25
Covered by personal allowance	£0
Dividend allowance used	£500
Effective rate on dividends	12.05%
Payment	File a Self Assessment return; pay by 31 January after the tax year

£4,821.25.

🧭 How to use this calculator

What you enter

Salary and other income (£)
Dividends for the year (£)

What you get

Dividend tax to pay
Covered by personal allowance
Dividend allowance used
Effective rate on dividends
Payment

❓ Frequently asked questions

What are the dividend tax rates for 2026/27?

10.75% basic rate, 35.75% higher rate and 39.35% additional rate, with a £500 tax-free dividend allowance.

How do I pay dividend tax?

Up to £10,000 of dividends, HMRC can collect it through your tax code. Above that, or if you already file one, use Self Assessment by 31 January after the tax year.

What is the best salary and dividend split for a director?

Many directors take a salary of £12,570 and the rest as dividends, but the right mix depends on corporation tax, pensions and other income.

Are dividends in an ISA taxed?

No. Dividends and gains inside a stocks and shares ISA or a pension are free of UK tax.

📈 UK Dividend Tax Calculator 2026/27 (10.75% & 35.75%)