Dividend tax calculator 2026/27

What are the dividend tax rates for 2026/27?

From 6 April 2026 the dividend ordinary and upper rates each rose by 2 percentage points, to 10.75% and 35.75%. The additional rate stays at 39.35%, and the £500 dividend allowance is unchanged (GOV.UK: tax on dividends). They apply across the UK (GOV.UK: Income Tax rates and allowances).

Scottish taxpayers pay the same UK rates on dividends and savings. Scotland's own bands apply only to wages, pensions and other non-savings income (GOV.UK: Scottish Income Tax). Wales uses the same bands as England in 2026/27 (GOV.UK: Welsh Income Tax).

How is tax on dividends worked out?

Dividends are taxed as the top slice of your income. Your income is stacked in a fixed order, and each layer is taxed in the band it lands in:

1. Other income first: salary, pension, self-employed and rental profit. The £12,570 Personal Allowance is usually set against this first.
2. Savings interest next. Up to £5,000 can be tax-free under the starting rate for savings, but each £1 of other taxable income cuts that by £1. The Personal Savings Allowance then covers £1,000 of interest for basic rate taxpayers, £500 for higher rate and nothing for additional rate (GOV.UK: tax-free savings interest).
3. Dividends on top. The first £500 is taxed at 0%, but it still uses up part of your band, so it can push later dividends into the higher rate (GOV.UK: tax on dividends).

For 2026/27, the law lets your Personal Allowance be set against your income in whichever way gives the lowest tax (Income Tax Act 2007, section 25). If your allowance is bigger than your other income, using the rest against dividends can keep your interest in the 0% starting rate. If your other income is just under the higher rate threshold, moving a little of the allowance lifts your 0% allowances into the higher rate band, where they save more. The calculator finds the cheapest split (for Scottish taxpayers it keeps the allowance on other income first).

Worked example: £12,570 salary and £50,000 of dividends

A director in England takes a £12,570 salary and £50,000 of dividends in 2026/27, with no other income. Using the 2026/27 bands on GOV.UK:

• The salary uses the whole Personal Allowance, so it is tax-free and the dividends start at £0 of taxable income.
• First £500 of dividends: dividend allowance, 0%.
• Next £37,200, up to the £37,700 band limit: 10.75% = £3,999.
• Last £12,300: 35.75% = £4,397.25.

Dividend tax is £8,396.25, an effective rate of 16.79%, payable by 31 January 2028.

Can dividends reduce my Personal Allowance?

Yes. Your Personal Allowance falls by £1 for every £2 of adjusted net income over £100,000, and is nil at £125,140 (GOV.UK: income over £100,000). Dividends count towards adjusted net income, so they can raise the tax on your salary too.

Take a £12,570 salary and £100,000 of dividends. Adjusted net income is £112,570, so the allowance drops to £6,285. Half the salary becomes taxable, costing £1,257, and the dividends move up the bands: dividend tax is £27,842.50 instead of £26,271.25. The taper costs £2,828.25 in all. Pension contributions and Gift Aid reduce adjusted net income (GOV.UK: adjusted net income), so they are worth a look near £100,000.

When and how do I pay tax on dividends?

How you tell HMRC depends on how much you receive (GOV.UK: how to report tax on dividends):

• Over £10,000: complete a Self Assessment tax return. If you don't already send one, tell HMRC by 5 October 2027 for 2026/27 dividends, for example by registering for Self Assessment.
• £10,000 or less, above your allowances: include them on your return if you already file one. If not, tell HMRC after 5 April 2027 and before 5 October 2027, by asking for your tax code to be changed or by calling the helpline.
• Within your dividend allowance: you don't need to tell HMRC.

For 2026/27, the online return and the tax are due by 31 January 2028 (GOV.UK: Self Assessment deadlines). If your bill is £1,000 or more, you may also have to make payments on account towards the next year, due on 31 January and 31 July (GOV.UK: payments on account).

What this calculator does not cover

• Scottish rates on salary, pension and other non-savings income. Choose Scotland and the tool works out the tax on savings and dividends only.
• Pension contributions, Gift Aid and other reliefs, which reduce adjusted net income and can restore an allowance lost to the taper.
• The High Income Child Benefit Charge, which starts once adjusted net income is over £60,000 (GOV.UK: High Income Child Benefit Charge).
• National Insurance, student loan repayments, Marriage Allowance, foreign dividends and dividends from shares held in an ISA, which are not taxed.
• Whether your company has enough profit to pay the dividend.

Deciding how to pay yourself? Our guide to paying yourself as a director compares salary, dividends and pension, and the tax savings calculator tests the mix for your company. The corporation tax calculator shows the tax on the profits behind your dividends, and our 2026/27 tax deadlines calendar lists every date. If you'd rather not file the return yourself, our personal tax service prepares and files your Self Assessment.