Updated for 2026/27

Dividend tax calculator 2026/27

Set company profit and dividends to see the dividend tax calculation: the £500 allowance, then 10.75%, 35.75% or 39.35% depending on your total personal income for 2026/27.

Updated for 2026/27. Uses UK corporation tax, dividend tax and PAYE assumptions. Estimates only — not tax advice.

Calculator checked against GOV.UK and HMRC rules on (how we check).

Calculate company tax Read the guides
£500 dividend allowance10.75% basic rateSalary interactionEffective rate
2026/27 tax year Company profit to personal take-home Salary plus dividends Retained cash shown

Limited company tax calculator

Company tax estimate

Adjust inputs below — results update instantly.

Tax year 2026/27
How do you want to enter company income?
£

Enter profit before director salary, pension contributions and corporation tax.

£

Annual profit used in calculations = monthly profit × 12.

£
£
Expenses exceed estimated turnover — check your inputs.
£
£
Expenses exceed estimated turnover — check your inputs.
£
£

Amount you plan to withdraw from available post-tax company profit.

Selected dividends exceed available post-tax company profit.
£
£
£47,749 personal take-home / year £3,979/mo
Personal take-home is based on salary and dividends withdrawn. Post-tax profit not withdrawn is retained company cash.
Monthly net
£3,979
Total tax
£18,450
Effective rate
24.6%
Personal take-home£47,749
Dividend tax£4,821
Employer NI£1,136
Corporation tax£12,493
Company pension£0
Retained company cash£8,801
Show detailed breakdown ▼
Director salary£12,570.00
Employer National Insurance£1,135.50
Corporation tax£12,493.04
Salary income tax£0.00
Employee National Insurance£0.00
Dividend tax£4,821.25
Retained company cash£8,801.46
Personal take-home£47,748.75
Effective tax rate24.60%
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HMRC 2026/27 · Methodology
Quick answer

Dividend tax in 2026/27 is 10.75%, 35.75% or 39.35% on dividends above the £500 allowance, depending on where they land once added to your salary. On a £12,570 salary, £40,000 of dividends costs £4,821.25.

Updated for 2026/27. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance · Editorial standards · Methodology. Estimates for planning only — not tax, accounting or financial advice.

Figures reviewed for the 2026/27 tax year. Source: GOV.UK.

About this calculator

Dividend tax calculator 2026/27: what it covers

This calculator works out the personal dividend tax on money you take out of your limited company as dividends. Dividends are paid from profit that has already been through corporation tax, so they carry no National Insurance for you or the company. The first £500 of dividends each year is covered by the dividend allowance and is taxed at 0%.

Above the allowance, dividends are taxed at 10.75% while they fall in the basic-rate band, 35.75% in the higher-rate band, and 39.35% in the additional-rate band.1 Crucially, dividends stack on top of your salary and other income: your salary uses up part of your Personal Allowance and basic-rate band first, so the band a dividend lands in depends on your total income for the year.

Because dividends come out of post-corporation-tax profit, the true cost is the combination of corporation tax on the company profit and the dividend tax you then pay personally. That combined rate is why dividend planning is usually done alongside your salary rather than in isolation.

Worked example

How £37,498 of dividends stacks on a £12,570 salary

Dividends are taxed by where they land once placed on top of your salary. Take a director on the usual £12,570 salary who draws £37,498.55 of dividends — the whole picture turns on the £50,270 basic-rate ceiling.

Salary (uses the Personal Allowance) £12,570
Dividends drawn £37,498.55
Dividend allowance (0%) £500
Basic-rate band left after salary £37,700
Dividends taxed at 10.75% £36,998.55
Dividends taxed at 35.75% £0
Total dividend tax £3,977.34

Total income here is £50,068.55, just under the £50,270 threshold, so every taxable dividend sits at 10.75%. One more pound of dividend would cross into the higher-rate band and be taxed at 35.75% — the cliff this calculator is built to make visible.

How it works

How dividend tax is calculated

  1. Add up your income in a fixed order: salary and other earnings first, then savings interest, then dividends on top.
  2. Any Personal Allowance your salary has not used covers dividends first, at 0%.3
  3. The next £500 of dividends is covered by the dividend allowance. It is a 0% rate, not extra allowance, so those £500 still use up basic-rate band.1
  4. Dividends inside the basic-rate band (total income up to £50,270) are taxed at 10.75%, up to £125,140 at 35.75%, and above that at 39.35%.
  5. Over £100,000 of total income, the Personal Allowance falls by £1 for every £2, and dividends count towards that test.
More worked examples

A £5,000 salary with £40,000 of dividends

A lower salary leaves £7,570 of Personal Allowance unused, and dividends use it.

Dividends covered by the unused allowance £7,570
Dividend allowance £500
Taxed at 10.75% £31,930.00
Dividend tax £3,432.47
Same dividends on a £12,570 salary £4,821.25

The lower salary means less dividend tax, but the company paid more Corporation Tax because the salary was smaller. The director salary calculator nets the two.

Crossing the higher-rate line: £60,000 of dividends

On a £12,570 salary, total income is £72,570, so part of the dividends lands above £50,270.

Dividend allowance £500
At 10.75% £37,200.00 → £3,999.00
At 35.75% £22,300.00 → £7,972.25
Total dividend tax £11,971.25

Only £37,200 of the dividends get the 10.75% rate: the £37,700 basic-rate band less the £500 that the allowance uses. Every pound above that pays 35.75%.

Losing the Personal Allowance: £120,000 of dividends

On a £12,570 salary, total income of £132,570 is above £125,140, so the whole Personal Allowance is withdrawn.

Dividend tax across the bands £36,831.22
Extra income tax on the salary (allowance withdrawn) £2,514.00
Total tax caused by the dividends £39,345.22

The salary that was tax-free becomes taxable because of the dividends. Directors near £100,000 often leave profit in the company or make an employer pension contribution to stay under it.

Mistakes and edge cases

Common dividend tax errors

Thinking the £500 is on top of the basic-rate band
The allowance uses band space. It saves at most £500 × 10.75% for a basic-rate taxpayer, not a whole extra slice of income.
Counting dividends by accounting year
Dividends are taxed in the tax year you receive them (6 April to 5 April). An interim dividend paid on 4 April and one paid on 7 April fall in different years.
Not registering for Self Assessment
Dividends above the £500 allowance must be reported to HMRC. Over £10,000 of dividends needs a Self Assessment return; if you do not already file one, register by 5 October after the tax year ends.1
Forgetting payments on account
If your Self Assessment bill is £1,000 or more and most of it was not taxed at source, HMRC asks for advance payments towards next year on 31 January and 31 July.
Common questions

Dividend tax calculator 2026/27 — FAQs

How much dividend can I take before paying any tax?
The dividend allowance covers the first £500 of dividends at 0% for everyone, regardless of your other income. On top of that, if your salary and other income are below the £12,570 Personal Allowance, some dividends can also be sheltered by the unused allowance. In practice a typical director on a £12,570 salary uses the full Personal Allowance on salary, so dividends beyond the £500 allowance are taxable.
What are the dividend tax rates for 2026/27?
After the £500 allowance, dividends are taxed at 10.75% within the basic-rate band (up to £50,270 of total income), 35.75% in the higher-rate band (£50,270 to £125,140), and 39.35% above £125,140. The rate applied depends on where the dividend falls once stacked on top of your salary.
Do I pay National Insurance on dividends?
No. Dividends are not earnings, so neither you nor the company pays National Insurance on them. This is one reason directors often take a modest salary plus dividends, though the company must first pay corporation tax on the profit before it can be distributed.
How do I report and pay dividend tax?
You report dividends from your own company through a Self Assessment tax return, entering the total received in the tax year. HMRC then calculates the dividend tax due based on the band your dividends fall into. Payment is normally due by 31 January following the end of the tax year.
Sources & references

Where these figures come from

The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.

  1. Tax on dividends www.gov.uk/tax-on-dividends
  2. Taking money out of a limited company www.gov.uk/running-a-limited-company/taking-money-out-of-a-limited-company
  3. Income Tax rates and Personal Allowances www.gov.uk/income-tax-rates
  4. Understand your Self Assessment tax bill: payments on account www.gov.uk/understand-self-assessment-bill/payments-on-account
Verified against published UK government guidance.
Power tools

More calculators

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Company profit to take-home: Corporation Tax, employer NI, salary and dividend tax in one view.
Corporation tax calculator 2026/27
The company's bill at 19%, 25% or with marginal relief, and when it is due.
Salary vs dividend calculator 2026/27
Compare taking money as salary or dividends and see which salary leaves you the most.
Director salary calculator 2026/27
£0, £5,000, £9,100 or £12,570: what each salary costs the company and saves you.
Available dividends calculator
How much the company can lawfully pay out after salary, pension and Corporation Tax.
Retained profit calculator 2026/27
What stays in the company when you take less than all the profit, and the tax that defers.
Director take-home pay calculator 2026/27
What reaches your bank account each year and month, and what to set aside for January.
Employer NI calculator for directors 2026/27
Employer NI on a director's salary, and when Employment Allowance cancels it.
Practical guides

Limited company guides

Limited Company Tax in Scotland 2026/27: Salary, Dividends and Corporation Tax
In Scotland, corporation tax is the same 19%–25% as the rest of the UK and dividends are taxed at the UK rates of 10.75%, 35.75% and 39.35%. Only a director's salary uses Scottish income tax bands. 2026/27 examples.
Corporation Tax Rates 2026/27: 19%, 25% and Marginal Relief
Corporation tax rates 2026/27: 19% on profits up to £50,000, 25% over £250,000, marginal relief between (26.5% marginal rate). £100,000 profit pays £22,750. Table and examples.
Optimal Salary and Dividend Split for Directors 2026/27
How to calculate the tax-efficient salary and dividend combination for a limited company director in 2026/27, covering corporation tax, income tax, NI and the dividend allowance.
Salary vs Dividends 2026/27: The Optimal Split for Company Directors
The tax-efficient salary vs dividends split for UK company directors in 2026/27: a £12,570 salary, then dividends taxed at 10.75%. Corporation tax, the £500 dividend allowance, employer NI and a full worked example extracting £50,000.
Director's Loan Account 2026/27: s455 at 35.75%, 30-Day Rule
Overdrawn director's loan account in 2026/27: s455 at 35.75% if not repaid 9 months and 1 day after year end, refundable later; £10,000 benefit-in-kind limit; 30-day rule.
Limited Company Allowable Expenses: A Practical Guide 2026/27
What a limited company can legitimately deduct as business expenses, reducing corporation tax. Covers running costs, director expenses, travel, equipment, and home office claims.
Getting set up

Business bank accounts

A limited company must keep its finances separate from personal accounts. These accounts are free to open.

Starling Business
Permanently free, no monthly fee. A fully licensed UK bank - eligible deposits are FSCS protected up to £120,000 per eligible depositor, per authorised bank (brands sharing one banking licence share one limit). A limited company's account is protected separately from your personal accounts. Accepts limited companies and sole traders. 0.7% on Post Office cash deposits.
Open an account →
Tide
Free to open. Built-in invoicing and expense tracking. 20p per outgoing transfer on the free tier (Tide Plus is £9.99/month). Funds are safeguarded as e-money, not FSCS protected. Usually has a new-account offer.
Open an account →
Mettle by NatWest
Free. Single-director limited companies only (max two owners, one account user). Includes FreeAgent bookkeeping at no extra cost. Funds are safeguarded as e-money, not FSCS protected. No cash deposits.
Open an account →
Registering at Companies House

Companies House now charges £100 to register a limited company online (up from £50 in February 2026). Same-day registration is £156, through software filing only (for example via a formation agent). You can register directly at gov.uk or through a formation agent.

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