UK Dividend Tax Calculator 2026/27
Estimate the personal tax due on UK dividends for 2026/27. Enter your salary and dividend income as a limited-company director to see the tax due at each rate band and your combined take-home.
Annual gross salary drawn from the company.
| Item | Amount | Tax |
|---|---|---|
| Personal allowance | £12,570.00 | |
| Income tax on salary | -£0.00 | |
| NI on salary | -£0.00 | |
| Dividend allowance (0%) | £500.00 | £0.00 |
| Basic rate dividends (10.75%) | £37,200.00 | -£3,999.00 |
| Higher rate dividends (35.75%) | £0.00 | -£0.00 |
| Additional rate dividends (39.35%) | £0.00 | -£0.00 |
| Take-home | £46,271.00 |
How it works
Limited company directors typically pay themselves in two currencies: salary (taxed like any employee) and dividends. Dividends can only be paid out of post-Corporation-Tax profit — the company pays 19–25% corporation tax first, and dividends come from what's left. This calculator estimates only the personal tax on dividends and salary already received; it is not company-accounting advice and does not check whether the company actually has distributable reserves to pay them.
Your salary and any other income determine which tax band your dividends land in, because dividends are treated as sitting on top of your other income. For 2026/27 the dividend rates are 10.75% within the basic-rate band, 35.75% within the higher-rate band and 39.35% above. Each taxpayer also gets a £500.00 dividend allowance taxed at 0% — importantly, that allowance still uses up band space, it just doesn't attract tax itself.
A common director setup: pay a salary equal to the personal allowance (£12,570) so income tax on salary is nil, then top up with dividends. Draw dividends up to the top of the basic-rate band — total income of £50,270 — and dividend tax is limited to 10.75% on the taxable slice. This yields a low blended tax rate but only works if the company genuinely has the retained profits to distribute. See our salary versus dividends guide for a fuller comparison.
Dividends carry no National Insurance and are usually more efficient than salary at higher levels, but a proper director tax review always models both together: corporation tax at the company level and personal tax at the individual level.
Worked example
A director draws a £12,570 salary (equal to the personal allowance, so no income tax or NI on it) and £37,700 in dividends. The first £500 of dividends is tax-free (dividend allowance), and the remaining £37,200 falls entirely within the basic-rate band, taxed at 10.75% — roughly £3,999 in dividend tax. Total personal tax on £50,270 of combined income is about £3,999, leaving take-home of roughly £46,271.
Limitations of this calculator
- Does not model corporation tax paid by the company before dividends are declared.
- Does not check whether the company has sufficient distributable reserves to legally pay the dividends entered.
- Excludes employer National Insurance, benefits in kind, or other income such as savings interest or property income.
- Not company-accounting or personalised tax advice — speak to an accountant before deciding a salary/dividend split.
Frequently asked questions
What is the dividend allowance in 2026/27?
£500.00. The first £500.00 of dividends after your personal allowance is taxed at 0%. Beyond that, dividend tax kicks in at 10.75%, 35.75% or 39.35% depending on your total income.
Do dividends use my personal allowance?
Yes. If your salary is below £12,570, the leftover personal allowance is used against your dividends before the dividend allowance kicks in.
Does the £500 allowance still use up band space?
Yes — this trips people up. The dividend allowance is taxed at 0%, but it still sits inside whichever tax band it falls into. It reduces the amount of dividend tax you pay, not the amount of basic or higher-rate band you have left.
Are dividends paid from post-tax profit?
Yes. The company pays 19–25% corporation tax on profits first; dividends are paid from what's left. Any comparison of salary vs dividends should include the corporation tax already paid, which this calculator does not model.
Does this calculator include employer NI or corporation tax?
No — this focuses on the personal tax you pay on salary and dividends already received. It is not company-accounting advice; for the full picture, model corporation tax and employer NI separately or speak to an accountant.
Related calculators
Official sources
Figures on this page follow official UK government guidance for the 2026/27 tax year. Rates last verified: 27 August 2026. See our data sources and calculation methodology.
Estimates for general guidance only — not personalised financial advice.