Dividend tax calculator
The tax on your dividends for 2026/27, band by band, and how much the next £1,000 would cost.
Quick answer. The first £500 of dividends is tax-free in 2026/27. Above that, dividends are taxed at 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. With £29,570 of wages and £3,000 of dividends, the dividend tax is £268.75.
Work out your dividend tax
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| Dividend allowance used | — |
|---|---|
| Personal allowance used on dividends | — |
| Basic rate (10.75%) | — |
| Higher rate (35.75%) | — |
| Additional rate (39.35%) | — |
| The next £1,000 of dividends would cost | — |
Dividends are the top slice
Your Personal Allowance is used against your other income first; dividends are then added on top. Wherever they land in the bands decides the rate: 10.75% up to the top of the basic-rate band, 35.75% in the higher-rate band, 39.35% above £125,140 of taxable income. The £500 dividend allowance is taxed at 0% but still takes up band space.
The £100,000 trap applies to dividends too
Your Personal Allowance shrinks by £1 for every £2 of income above £100,000, and dividends count towards that income. A director who takes extra dividends above £100,000 can lose allowance on their salary as well as pay tax on the dividends.
Scotland, ISAs and reporting
Scottish taxpayers pay the same UK dividend rates; only their tax on salary differs, so the "tax on other income" line here uses rest-of-UK rates. Dividends from shares held in an ISA are tax-free. If your dividends are more than your unused Personal Allowance plus the £500 dividend allowance, you need to tell HMRC.
Common questions
What is the dividend allowance for 2026/27?
£500. You only pay tax on dividend income above that, and dividends within your unused Personal Allowance are also tax-free.
What are the dividend tax rates for 2026/27?
10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band, for the tax year from 6 April 2026 to 5 April 2027.
How do I know which band my dividends are in?
Add your dividends to your other income. Dividends are treated as the top slice, so they are taxed at the rate for the band they fall into after your salary or other income. You may pay more than one rate.
Do Scottish taxpayers pay different dividend tax?
No. Dividend tax rates are the same across the UK. Scottish income tax rates apply to salary and other non-savings income only.
Are dividends in an ISA taxed?
No. You do not pay tax on dividends from shares held in an ISA.
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