Calculate Your Dividend Tax
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Dividend Tax Breakdown — 2026/27
Total Dividend Tax Due
£0
Effective rate: 0%
Dividend Allowance (tax-free)£500
Taxable Dividends£0
Basic Rate (10.75%)£0
Higher Rate (35.75%)£0
Additional Rate (39.35%)£0
Dividend Tax Rates in 2026/27
If you receive dividends — for example as a company director or investor — you benefit from a £500 tax-free Dividend Allowance before any tax is due. Dividends above this are taxed at different rates depending on which income tax band they fall into.
Basic rate taxpayers pay 10.75% on dividends, higher rate taxpayers pay 35.75%, and additional rate taxpayers pay 39.35%. Importantly, dividends do not attract National Insurance contributions, which makes extracting income as dividends tax-efficient for company directors.
Dividend Tax Examples
| Dividends | Other Income | Tax Band | Dividend Tax |
|---|---|---|---|
| £5,000 | £12,570 | Basic | £394 |
| £10,000 | £12,570 | Basic | £829 |
| £20,000 | £30,000 | Higher | £6,244 |
| £30,000 | £50,270 | Higher/Add. | £10,104 |
| £50,000 | £80,000 | Additional | £19,478 |
Frequently Asked Questions
What is the dividend allowance for 2026/27? ▼
The dividend allowance is £500 for 2026/27. You can receive up to £500 in dividends without paying any dividend tax, regardless of your other income.
Why are dividends more tax-efficient than salary? ▼
Dividends are not subject to National Insurance contributions, whereas salary is taxed with both Income Tax and NI. For company directors, a combination of a small salary (up to the personal allowance) and dividends is typically more tax-efficient.
Do I need to report dividends on Self Assessment? ▼
You must report dividends on a Self Assessment return if your total dividend income exceeds £1,000 in a tax year, or if you pay higher or additional rate tax on them.
All figures are estimates based on HMRC rates for 2026/27. Always consult a qualified accountant for personalised advice.