UK Dividend Tax Calculator 2026/27
Stacks dividends on top of your salary or other income, applies the £500 dividend allowance, and works out the tax at the right band rate(s). Useful for company directors, contractors, and shareholders.
How the 2026/27 dividend tax stack works
Dividends are taxed differently from salary in two important ways. First, there is a separate small allowance (£500 in 2026/27) on top of your normal personal allowance. Second, the rates are deliberately lower than income tax rates: 8.75% basic, 33.75% higher, 39.35% additional, versus 20% / 40% / 45% on salary.
The order matters. Other income (salary, self-employment, pension drawdown, rental) is taxed first and uses up your £12,570 personal allowance. Any unused personal allowance then covers dividends tax-free. Next, the £500 dividend allowance covers another slice of dividends tax-free. Whatever is left gets taxed at the rate of whichever band the dividend stack reaches into.
The band ceilings for 2026/27 are £50,270 (top of basic rate) and £125,140 (top of higher rate). A single dividend payment can straddle two bands if it crosses a ceiling - the calculator above handles that automatically and shows you how each pound was treated.
2026/27 dividend tax bands
| Band | Total income range (incl. dividends) | Dividend tax rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Dividend allowance | First £500 of dividends above PA | 0% |
| Basic rate | £12,570 - £50,270 | 8.75% |
| Higher rate | £50,270 - £125,140 | 33.75% |
| Additional rate | Above £125,140 | 39.35% |
Above £100,000 of total income, the personal allowance is tapered down by £1 for every £2 of income, reaching zero at £125,140. The calculator handles the taper automatically.
Three worked examples
£35,000 salary + £10,000 dividends
Salary fully uses the £12,570 personal allowance. The £500 dividend allowance covers the first £500 of dividends. The remaining £9,500 sits in the basic rate band (8.75%).
Dividend tax: £831.25
£80,000 salary + £20,000 dividends
Salary fully uses personal allowance and most of the basic rate band. After the £500 dividend allowance, the remaining £19,500 falls entirely in the higher rate band (33.75%).
Dividend tax: £6,581.25
£150,000 salary + £20,000 dividends
Personal allowance is fully tapered out (lost above £125,140 total income). The £500 dividend allowance still applies. All remaining £19,500 of dividends fall in the additional rate band (39.35%).
Dividend tax: £7,673.25