Dividend tax calculator 2026/27
Short answer: For 2026/27 the first £500 of dividends is tax-free, then dividends are taxed at 10.75% (basic band), 35.75% (higher) and 39.35% (additional). GOV.UK's example of £29,570 wages and £3,000 dividends gives £268.75 of dividend tax.
Last updated: · Last checked against GOV.UK: · Markdown version
General information, not tax or financial advice. Check GOV.UK or speak to a qualified adviser about your own situation.
How is it calculated?
Your Personal Allowance is used against salary first, then dividends. The first £500 of dividends is taxed at 0% but still uses up band. Dividends that fall in the basic band are taxed at 10.75%, the higher band at 35.75% and the additional band at 39.35%. This does not work out the Income Tax on your salary itself. Scotland: dividend rates are UK-wide, but this tool uses the rUK bands to decide which band applies.
Example from GOV.UK: £29,570 wages and £3,000 dividends gives £0 on £500 and 10.75% on £2,500 of dividends.
What is the formula, in plain text?
Personal Allowance is used against salary first, then dividends. The first £500 of dividends is taxed at 0% but still uses band. Remaining dividends are taxed at 10.75% within the basic band (first £37,700 of taxable income), 35.75% up to £125,140 total income and 39.35% above.
What rates and thresholds apply?
| Item | 2026/27 |
|---|---|
| Dividend allowance | £500 |
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
What are some worked examples?
| Salary / other income | Dividends | Dividend tax |
|---|---|---|
| £29,570 | £3,000 | £268.75 |
| £12,570 | £30,000 | £3,171.25 |
| £50,270 | £10,000 | £3,396.25 |
| £0 | £20,000 | £744.98 |
| £12,570 | £60,000 | £11,971.25 |
First row is GOV.UK's own example. Tax on the salary itself is not included.
GOV.UK sources (checked 15 October 2026): https://www.gov.uk/tax-on-dividends · https://www.gov.uk/income-tax-rates
Machine-readable rates: api/rates-2026-27.json.
Frequently asked questions
What is the dividend allowance for 2026/27?
£500. You pay no tax on the first £500 of dividends, though they still count towards your tax band.
What are the dividend tax rates for 2026/27?
GOV.UK lists 10.75% for the basic rate, 35.75% for the higher rate and 39.35% for the additional rate, from 6 April 2026 to 5 April 2027.
Do I pay tax on dividends in an ISA?
No. Dividends from shares held in an ISA are tax-free.
Do I pay National Insurance on dividends?
No. National Insurance is not charged on dividends, which is why many company directors take a small salary and the rest as dividends.