UK Dividend Tax Calculator

Work out the tax on your dividends for the 2026 to 2027 tax year, after the £500 dividend allowance.

Rates verified 26 Oct 2026Formula explained below

All dividends from UK and overseas shares and your own company, outside an ISA or pension.

Salary, self-employed profits, pensions and rental profit, before tax. This decides which band your dividends fall in.

Tax on your dividends

£1,116.25

Dividends after tax
£8,883.75
Effective rate on dividends
11.16%
At 10.75% (basic rate)
£980.40
At 35.75% (higher rate)
£135.85
At 39.35% (additional rate)
£0.00

With £40,650.00 of other income, tax on £10,000.00 of dividends is £1,116.25, leaving £8,883.75 after tax.

Calculation breakdown

StepFormulaResult
Personal Allowance£12,570.00 (full allowance)£12,570.00
Dividends above the Personal Allowance£10,000.00 minus any Personal Allowance not used by £40,650.00£10,000.00
Dividend allowance (taxed at 0%)First £500.00 of dividends£500.00
Basic rate band£9,120.00 × 10.75%£980.40
Higher rate band£380.00 × 35.75%£135.85
Additional rate band£0.00 × 39.35%£0.00

How it works

Enter your dividends for the tax year and your other income before tax. The calculator places your dividends on top of your other income and taxes them band by band.

Personal Allowance: £12,570 (reduced by £1 for every £2 of income above £100,000)Dividend allowance: first £500 of dividends at 0% (it still uses up band)Basic rate band: first £37,700 of taxable income → dividends at 10.75%Higher rate band: up to £125,140 of taxable income → dividends at 35.75%Above £125,140 → dividends at 39.35%

Worked example

This is LITRG’s example: earnings of £40,650 and dividends of £10,000.

  1. Earnings after the Personal Allowance: £40,650 − £12,570 = £28,080
  2. Basic rate band left: £37,700 − £28,080 = £9,620
  3. Dividend allowance: first £500 at 0%
  4. Rest of the basic rate band: £9,120 × 10.75% = £980.40
  5. Higher rate band: £380 × 35.75% = £135.85
  6. Tax on dividends: £980.40 + £135.85 = £1,116.25

Sources

Frequently asked questions

What are the dividend tax rates for 2026 to 2027?

GOV.UK lists 10.75% for dividends in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. The basic and higher rates went up by 2 percentage points from 6 April 2026, and the rates apply across the UK.

How much is the dividend allowance?

The dividend allowance is £500 for 2026 to 2027. The first £500 of dividends above your Personal Allowance is taxed at 0%, but it still counts towards your income and uses up part of your tax band.

How is dividend tax calculated?

Add your dividends on top of your other income. Use any Personal Allowance your other income does not need, take off the £500 allowance, then tax the rest at the rate for the band each pound falls in. LITRG’s example with £40,650 of earnings and £10,000 of dividends comes to £1,116.25.

Do I pay tax on dividends in an ISA or pension?

No. Dividends from shares held in an ISA or a pension are not taxed and do not use your dividend allowance, so leave them out of the calculation.

Does this work in Scotland?

Dividends are taxed at the same rates across the UK. This calculator uses the UK bands to place your other income, which is how dividends are taxed for Scottish taxpayers too, but it does not work out the Scottish Income Tax on your salary.

What is not included?

Savings interest, the starting rate for savings, Gift Aid, pension contributions and the Marriage Allowance can change your bands and are not included. Your Self Assessment calculation can therefore differ.

Take-Home PaySalary after Income Tax and National InsuranceNational InsuranceEmployee, employer and self-employed NI for 2026/27Pro Rata SalaryPart-time salary and holiday from full-timeVATAdd or remove VAT at 20%, 5% or 0%

Results are estimates for information only, not tax advice. They assume the standard Personal Allowance and no savings income.