Dividend Tax Calculator 2026/27

How it's calculated

Dividend Income Tax is charged on dividends from UK companies, including dividends you pay yourself from your own limited company, but never in isolation. Your income is stacked in a fixed order: other income (salary, pension, trading or rental profit) first, then savings interest, then dividends on top, so the rate on your dividends depends on everything below them. First, your Personal Allowance of £12,570 is worked out; it falls by £1 for every £2 of adjusted net income above £100,000 (rounded up to a whole pound) and is nil from £125,140. For 2026/27 the law lets the allowance be set against whichever income gives the largest cut in your total Income Tax (Income Tax Act 2007, s.25(2)). Usually that is your salary, but not always: with other income just under the higher-rate point, or with savings interest that can use the 0% savings bands, moving part of the allowance can save more than it costs. The calculator tries every split where the answer can change and keeps the cheapest. A fixed order applies only from 2027/28.

Savings interest that falls within the first £5,000 of taxable income is taxed at 0% (the starting rate for savings); your other income uses up that £5,000 first. The next £1,000 of savings is also taxed at 0% (the personal savings allowance), or £500 if any of your income falls above the basic-rate limit, and none above the higher-rate limit. The rest of the interest is taxed at 20%, 40% or 45%. Dividends then sit above your taxable savings, measured in taxable income: the ordinary rate up to £37,700, the upper rate up to £125,140 and the additional rate above that. The first £500 of taxable dividends is taxed at 0% (the dividend allowance), but, like the savings allowances, it still fills band space. The remaining dividends are taxed at 10.75%, 35.75% or 39.35%.

Pension contributions paid with relief at source and Gift Aid donations work the other way round: the gross amount (what you paid plus 25%) is added to the £37,700 and £125,140 limits, so more of your dividends fall in the lower bands, and it is taken off your adjusted net income, which can give back Personal Allowance lost to the taper. For Scottish taxpayers the gross amount also raises the Scottish salary limits from the basic rate upwards. Scottish taxpayers use the same savings and dividend rates and bands as the rest of the UK; their different salary rates only change which allowance split is cheapest.

Relief R = (pension paid + Gift Aid paid) × 100/80
Adjusted net income = other income + savings + dividends − R
Personal Allowance PA = £12,570 − ½ × (adjusted net income − £100,000), rounded up, not below £0
Band limits: ordinary/basic to £37,700 + R, upper/higher to £125,140 + R

Split PA between other income, savings and dividends to minimise
   tax on other income + tax on savings + tax on dividends

Stack in taxable income: other income, then savings, then dividends
Savings: 0% within the first £5,000 of taxable income, then 0% on the next £1,000 / £500 / £0,
   rest at 20% / 40% / 45%
Dividends: first £500 at 0%, rest at 10.75% / 35.75% / 39.35% by band

Dividends after dividend tax = dividends − dividend tax
Extra Income Tax caused by the dividends = total tax − total tax with the same facts and no dividends

Worked example

Take a company director in England with a £12,570 salary who takes £50,000 of dividends in 2026/27, with no other income, savings interest or pension relief:

The dividend tax is £8,396.25, leaving £41,603.75 of the dividends. That is an effective dividend tax rate of 16.79% (£8,396.25 ÷ £50,000): £12,300 of the dividends were taxed at 35.75%, but £37,200 sat in the 10.75% band and £500 was taxed at 0%.

When your result may differ

The headline is the Income Tax on your dividends, and what is left of the dividends after it. It is not your total take-home pay and not what it costs your company to pay the dividend; Corporation Tax, National Insurance and the salary-versus-dividend question (company extraction costs) are outside it. If your dividends take your adjusted net income above £100,000, the allowance taper also raises the tax on your other income; the row Extra Income Tax caused by these dividends compares your total Income Tax with and without the dividends, with everything else the same, so it includes that effect. With £100,000 of other income and £10,000 of dividends the dividend tax is £3,396.25 but the extra Income Tax is £5,396.25.

Pension contributions are counted as you enter them: relief is only due on payments up to your UK earnings for the year (or £3,600 gross), and the pension annual allowance charge on very large contributions is not included, so contributions above those limits make the figure lower than your real tax. Contributions taken from your pay before tax (net pay or salary sacrifice) are already out of your income figure and must not be entered again. If your Income Tax is below the tax the charities reclaim on your Gift Aid, HMRC can ask you for the difference; the calculator flags this but does not add it. The calculator shows no figure when you tell it you have Marriage Allowance, Blind Person's Allowance, no Personal Allowance, foreign income or non-UK residence, because it does not model them. Dividends and interest inside an ISA or a pension are not taxable and should be left out.

The allowance split follows the 2026/27 rule (the cheapest split in total); from 2027/28 a fixed order applies, and savings rates rise by 2 percentage points, so the same figures can give a different answer next year. Scottish taxpayers pay the same dividend and savings rates, but the dividend tax can still differ from England: with £50,070 of other income and £20,000 of dividends it is £6,899.75 in England, Wales or Northern Ireland and £6,971.25 in Scotland, because the 42% Scottish salary rate makes the salary-first split the cheapest there. Payments made on different sides of 6 April belong to different tax years; enter only amounts paid in 2026/27. The reporting row follows HMRC's dividend reporting guidance; payments on account for later years depend on facts the calculator does not collect and are not estimated.

Rates and thresholds

UK savings and dividend tax, 2026/27 tax year. Bands are in taxable income (after the Personal Allowance), raised by any gross relief-at-source pension contributions and Gift Aid, and apply in England, Wales, Northern Ireland and Scotland alike.

Sources & legal basis

Update log

• 2026-06-04 — Initial 2026/27 setup with the £500 dividend allowance.
• 2026-06-15 — Added worked example, rates table and source table; expanded the explanation of how dividends stack on top of salary and the £500 allowance.
• 2026-07-14 — Updated to the current gov.uk 2026/27 dividend rates: 10.75% ordinary, 35.75% higher and 39.35% additional; re-derived the £50,000 dividend worked example.
• 2026-09-05 — Correction after the UK Astra thread (evening of 2026-09-05): dividend bands are now measured in taxable income (ordinary to £37,700, upper to £125,140) instead of the gross £50,270 / £125,140 ceilings — £110,000 dividends, no salary: £27,139.98 (previously £25,889.98); tapered allowance rounded up to a whole pound (ITA 2007 s.35(3)). The default example (£12,570 salary, £50,000 dividends → £8,396.25) is unchanged.
• 2026-09-26 — Correction after the Astra review of 2026-09-26: for 2026/27 the Personal Allowance is now set against whichever income gives the lowest total Income Tax (ITA 2007 s.25(2)), not always salary first. £50,070 other income and £20,000 dividends in England: dividend tax £6,899.75 (previously £6,971.25). Scottish salary rates (Scottish Rate Resolution 2026-27) are used to choose the split. A blank or negative amount no longer counts as £0, and savings interest, relief-at-source pensions, Gift Aid, special allowances and foreign income now stop the calculation instead of being mixed into salary. The default example (£12,570 salary, £50,000 dividends: £8,396.25) is unchanged.
• 2026-09-26 — Savings interest, relief-at-source pension contributions and Gift Aid are now calculated instead of stopping the calculation. Savings get the starting rate for savings and the personal savings allowance, and the Personal Allowance can be split three ways where that lowers total tax: £12,570 of savings and £10,000 of dividends now gives dividend tax of £376.25 (it was £1,021.25 if the interest was typed into the salary box). Pension contributions and Gift Aid raise the band limits and lower adjusted net income: £12,570 salary, £50,000 dividends and an £8,000 pension payment give £5,896.25. New rows show the extra Income Tax the dividends cause (£5,396.25 on £100,000 of other income and £10,000 of dividends) and how to report the dividends to HMRC. The default example (£12,570 salary, £50,000 dividends: £8,396.25) is unchanged.