Dividend Tax (UK)
Compute UK dividend tax beyond the £500 Dividend Allowance at the 8.75/33.75/39.35% rates.
Data verified · May 2026
What is the dividend allowance for 2025/26?
£500. Dividends within this allowance are taxed at 0%; only dividends above it are taxed.
Source: HMRC dividend tax (gov.uk/tax-on-dividends); Income Tax Act 2007 s 13A. · updated 2026
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Everything about Dividend Tax (UK)
📋Overview+
Calculates UK dividend tax for 2025/26. Dividends stack on top of other income after the £500 Dividend Allowance and are taxed at 8.75% (basic), 33.75% (higher) and 39.35% (additional).
💡 Best practices
- Unused Personal Allowance can shelter dividends if other income is low.
- Salary/dividend mix planning is common for owner-managed companies.
🔢 Concrete example
A higher-rate taxpayer receiving £10,000 in dividends (2025/26): the first £500 is covered by the Dividend Allowance and the remaining £9,500 is taxed at 33.75% = £3,206.25.
📖User guide+
How to use this calculator
- 1
Enter dividend income.
- 2
Enter other taxable income to position dividends in the bands.
- 3
Adjust the Dividend Allowance if needed.
- 4
Read the dividend tax and effective rate.
📚Glossary+
- Dividend Allowance
- £500 of dividends taxed at 0% in 2025/26.
- Ordinary rate
- 8.75% on dividends within the basic-rate band.
ℹ️Sources & updates+
Last data update
May 21, 2026
Sources and references
HMRC dividend tax (gov.uk/tax-on-dividends); Income Tax Act 2007 s 13A.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
FAQ — Dividend Tax (UK)
What is the dividend allowance for 2025/26?+
£500. Dividends within this allowance are taxed at 0%; only dividends above it are taxed.
What are the dividend tax rates?+
8.75% within the basic-rate band, 33.75% in the higher-rate band and 39.35% in the additional-rate band. Dividends are stacked on top of your other income.
Are dividends taxed before or after salary?+
Dividends are treated as the top slice of income, so salary and other income are taxed first and determine which band the dividends fall into.
Why do company owners mix salary and dividends?+
Owner-managers often combine a modest salary with dividends because dividend rates are lower than employment tax plus NIC — though corporation tax is paid on company profits first.