UK Dividend Tax Calculator
Dividends stack on top of your salary and other income, then get taxed at 8.75% / 33.75% / 39.35% depending on which band they land in. Enter your numbers and see exactly what you'll owe — including how the £500 Dividend Allowance and any unused Personal Allowance eat into your bill.
Your dividend tax
Breakdown
| Band | Dividends in band | Rate | Tax |
|---|---|---|---|
| Personal Allowance (unused) | £0 | 0% | £0 |
| Dividend Allowance | £0 | 0% | £0 |
| Basic rate | £0 | 8.75% | £0 |
| Higher rate | £0 | 33.75% | £0 |
| Additional rate | £0 | 39.35% | £0 |
Enter your numbers to see the breakdown.
Who this calculator is really for
Three main audiences hit this page: company directors extracting profit as dividends, investors holding shares outside an ISA, and employees receiving small dividend income from an ex-employer's shares. The mechanics are the same in all three cases — what changes is how large the numbers get and whether you should be thinking about the Corporation Tax paid first.
The classic director setup
A Ltd company director on £12,570 salary (using up the entire Personal Allowance) pays no Income Tax and only tiny NI. Every dividend pound then goes:
- First £500 — Dividend Allowance, 0% tax
- Next £37,200 — 8.75% (basic-rate band)
- Next £74,870 — 33.75% (higher-rate band)
- Above — 39.35%
Try £12,570 salary + £50,270 dividends in the calculator and you'll see the effective rate on dividends is well below 10%. It's why "salary + dividends" beats "salary only" for owner-directors — remembering that Corporation Tax was already paid by the company before those dividends could be declared.
Investors outside an ISA
Every year of taxable dividends outside an ISA is a year of unnecessary tax. Use your £20,000 ISA allowance first. Only after you've maxed that (and a pension, and a Junior ISA where relevant) should dividends be sitting in a general investment account. If they already are, consider "Bed & ISA" — sell, use the ISA allowance, buy back inside the wrapper (watching for the 30-day capital-gains rule for the sale side).
Related calculators
- UK Take-Home Pay — for the salary side of a salary+dividends setup.
- Self-Employed Tax — sole trader alternative to running a Ltd.
- Salary Sacrifice — the pension route to lowering your other income.
- Compound interest — what those saved-tax pounds could turn into.
Frequently asked questions
How does UK dividend tax actually work?
Dividends stack on top of your other income for tax-band purposes. The first £500 of dividends is tax-free (the Dividend Allowance for 2024/25). Above that, dividends falling in the basic-rate band are taxed at 8.75%, in the higher-rate band at 33.75%, and in the additional-rate band at 39.35%. Because they stack on top of salary, some of your dividends can be taxed at basic while others hit higher — this calculator handles the split.
What about my Personal Allowance?
If your other income (salary, self-employment, rental) doesn't use up the full £12,570 Personal Allowance, dividends can use whatever is left — completely tax-free, before even the £500 dividend allowance kicks in. This is why the classic 'director's £12,570 salary + dividends' setup is so tax-efficient. The Personal Allowance still tapers between £100,000 and £125,140 of total income.
Are ISA dividends taxable?
No — dividends inside a Stocks & Shares ISA are completely tax-free and don't count toward any of the thresholds shown here. This calculator is only for dividends outside tax-advantaged wrappers (general investment accounts, a Ltd company you own shares in, etc.).
Does this include Scottish tax rates?
Dividend tax rates are set UK-wide, not by Scotland — so Scottish taxpayers use exactly the same 8.75% / 33.75% / 39.35% dividend rates and the same £500 allowance. Only their earned-income bands (salary, pension, self-employment) are different. This calculator therefore works for Scottish dividend recipients too, though if you have Scottish earned income use our Scottish take-home calculator for salary tax.
What about Class 1/2/4 National Insurance?
None. Dividends pay zero National Insurance, which is the other reason directors extract profits as dividends rather than salary. Corporation Tax is paid by the company before dividends are declared (at 19% or 25% for 2024/25), so the total effective tax on distributed profit is higher than the dividend rate alone suggests.
What rates does this calculator use?
2024/25 UK tax year. Personal Allowance £12,570 (tapered £100k–£125,140). Basic-rate band £12,570–£50,270 → dividends at 8.75%. Higher-rate band £50,270–£125,140 → dividends at 33.75%. Above £125,140 → dividends at 39.35%. Dividend Allowance £500. Always double-check gov.uk if you're reading this in a new tax year.
Extract profit tax-efficiently
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