Indietax

Dividend Tax Calculator 2026/27

Updated for the 2026/27tax year · Last updated

Enter your dividend income and any other income (salary, profits) to calculate dividend tax correctly. Dividends always sit on top of other income — the calculator applies the right rate based on which band your dividends fall into.

Dividend tax

£1,706.25

£500 covered by dividend allowance

BandRateTax
Basic Rate8.75%£1,706.25

Dividend allowance: £500 · Basic rate: 8.75% · Higher rate: 33.75% · Additional rate: 39.35%

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How this calculator works

The personal allowance is applied to total income first. Other income fills the bands from the bottom; dividends sit on top. The £500 dividend allowance is then applied to the remaining taxable dividends. Whatever is left is taxed at the relevant dividend rate for that band.

For income above £100,000, the personal allowance tapers — this affects how much of the lower bands remain available for dividends.

Frequently asked questions

The dividend allowance is £500 for 2026/27 — reduced from £2,000 (2022/23) to £1,000 (2023/24) and then to £500 from 2024/25. Dividends up to £500 are tax-free regardless of your tax band.
Basic rate (within the basic-rate income tax band): 8.75%. Higher rate: 33.75%. Additional rate (above £125,140): 39.35%. These rates apply after the personal allowance and the £500 dividend allowance are used up.
Dividends are treated as the top slice of income. Other income (salary, self-employment profits) fills the lower tax bands first. The dividend rate you pay depends on which band your dividends fall into once other income is already accounted for.
No. National Insurance does not apply to dividend income. This is one of the reasons limited company directors often take a combination of small salary and dividends — the dividends are not subject to employer or employee NI.

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