How much tax do I pay on dividends in 2026/27?

The first £500 of dividends is tax-free. Above that, dividends are taxed at 10.75% within the basic-rate band, 35.75% in the higher-rate band and 39.35% above. The basic and higher rates rose by 2 percentage points from 6 April 2026; the additional rate is unchanged. Your rate depends on your total income, because dividends sit on top of it.

How does the £500 dividend allowance work?

It is a 0% band, not a deduction — the first £500 of dividends is taxed at 0%, but it still uses up part of whichever tax band it falls in. So it shelters £500 of dividends from tax, but does not push other income into a lower band.

Do dividends count as income for the tax bands?

Yes. Dividends are stacked on top of your other income (salary, pension, self-employment). So if your other income already reaches the higher-rate threshold, your dividends are taxed at the higher dividend rate from the first pound above the allowance.

Is dividend tax different in Scotland?

No. Although Scotland sets its own Income Tax bands, dividends are taxed at the same UK-wide dividend rates and thresholds wherever you live in the UK. This calculator therefore applies the UK rates for everyone.

Dividend tax calculator 2026/27

Whether you draw dividends from your own company or hold shares, the tax depends on your other income. Enter both to see your dividend tax for 2026/27 — after the £500 allowance, at this year’s higher rates — and what you keep.

Your other income

Salary, pension or self-employment, before tax.

Dividends received

2026/27. Dividends are taxed at UK-wide rates wherever you live in the UK.

On £10,000 of dividends

2026/27

Tax-free dividend allowance: £500
Dividend tax: −£1,021.25

Dividends after tax

what you keep

£8,979

That is an effective 10% on your dividends. Your dividends sit on top of your other income, which sets the rate.

Verified · 2026/27
21 June 2026

How this was calculated

We stack your dividends on top of your other income. The first £500 is taxed at 0% (but still uses band space), then the rest is taxed at the dividend rates for the band it falls in — 10.75% basic, 35.75% higher, 39.35% additional for 2026/27. We honour your Personal Allowance and its taper over £100,000. Dividend rates and thresholds are UK-wide and traced to a dated gov.uk source.

The full method and every source is on our methodology page.

Built & maintained by the Pay Packet team · methodology sourced from HMRC · last reviewed 21 June 2026. About our figures →

How dividends are taxed

Dividends have their own rates, lower than the tax on wages but higher than they used to be. The first £500 each year is tax-free. Beyond that, dividends are taxed at 10.75% while they fall in your basic-rate band, 35.75% in the higher-rate band, and 39.35% above — the basic and higher rates each went up 2 points on 6 April 2026.

The key is that dividends are stacked on top of your other income. The calculator first places your salary, pension or self-employment income, then your dividends on top — so the rate they attract depends on how much room is left in each band. Someone with a £30,000 job pays 10.75% on most of their dividends; someone already earning £60,000 pays 35.75%.

Drawing dividends from your own company? Pair this with the limited company tax calculator to see Corporation Tax first, or the sole trader vs limited company calculator if you are deciding how to trade. Dividends are reported through Self Assessment.

Rates are from gov.uk’s Tax on dividends.

Dividend tax questions

How much tax do I pay on dividends in 2026/27?: The first £500 of dividends is tax-free. Above that, dividends are taxed at 10.75% within the basic-rate band, 35.75% in the higher-rate band and 39.35% above. The basic and higher rates rose by 2 percentage points from 6 April 2026; the additional rate is unchanged. Your rate depends on your total income, because dividends sit on top of it.
How does the £500 dividend allowance work?: It is a 0% band, not a deduction — the first £500 of dividends is taxed at 0%, but it still uses up part of whichever tax band it falls in. So it shelters £500 of dividends from tax, but does not push other income into a lower band.
Do dividends count as income for the tax bands?: Yes. Dividends are stacked on top of your other income (salary, pension, self-employment). So if your other income already reaches the higher-rate threshold, your dividends are taxed at the higher dividend rate from the first pound above the allowance.
Is dividend tax different in Scotland?: No. Although Scotland sets its own Income Tax bands, dividends are taxed at the same UK-wide dividend rates and thresholds wherever you live in the UK. This calculator therefore applies the UK rates for everyone.

An estimate for the 2026/27 tax year — guidance, not personal tax advice. It taxes dividends stacked on the other income you enter, with the £500 allowance and the UK-wide dividend rates; it does not cover dividends held within an ISA or pension (which are tax-free). Check the detail with gov.uk/HMRC.