2026-27 · Dividend Tax
Dividend Tax Calculator
Calculate exactly how much dividend tax you owe in 2026-27. Shows which rate bands apply and how dividends stack on top of your director salary.
Your income
2026-27 rates
Dividend tax
£2,581
Total tax
£2,581
Effective rate
6.1%
Full breakdown
How dividend tax works
- 1
Dividends stack on top of salary
When calculating which band your dividends fall into, your salary income fills the bands first. Dividends then start from where salary left off.
- 2
£500 allowance first
The first £500 of dividend income each year is tax-free. This applies regardless of your salary level.
- 3
Basic rate band (8.75%)
Dividends in the basic rate band (income up to £50,270) are taxed at 8.75%. Most directors with modest salary and dividends pay this rate.
- 4
Watch the £100k trap
Once total income exceeds £100,000 your personal allowance tapers, creating an effective 60% marginal rate up to £125,140. Pension contributions are the main mitigation.
HMRC sources
Disclaimer: For illustrative purposes only. Does not account for other income sources, Gift Aid, pension contributions, or other adjustments that may affect your tax position. Consult a qualified accountant.
FAQs
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