Dividend tax calculator 2026/27

Enter your salary and the dividends you plan to take, and see the tax band by band at this year's higher rates, how much more you could take before the higher rate bites, and exactly when the bill is due. Every line of the working is shown.

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The gross salary the company pays you through payroll. Most single-director companies use £12,570, which is exactly the tax-free Personal Allowance. Salary is taxed before dividends, so it decides which band your dividends start in.

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Dividends are paid out of the company's profit after Corporation Tax. Each one needs the directors' decision recorded in board minutes, a dividend voucher for each shareholder, and enough profit in the company to cover it. £37,700 on top of a £12,570 salary takes you exactly to the top of the basic rate band.

Tailor it to you: other income, pension, student loan, children, Scottish tax
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Any income outside this company, such as another job, a pension or rent from a property. HMRC taxes it alongside your salary, before your dividends, so it uses up allowance and basic rate band and can push your dividends into a higher band. Leave at 0 if none.

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Enter the amount paid in this year and choose below how it is paid. Contributions you pay personally get 20% added by the provider and extend your basic rate band, so more of your dividends stay at 10.75%. Contributions paid straight from the company into your SIPP do not change your personal tax at all, but they save the company Corporation Tax, and the calculator will show you that instead.

Which one do I have?

Relief at source (most personal pensions and SIPPs): you pay from your own bank, the provider adds 20%, and higher rate relief comes through your tax return by extending your basic rate band. Enter the amount that leaves your bank. Net pay (most workplace schemes): the contribution comes off your salary before tax is worked out, so relief is immediate and there is no band extension. Enter the amount shown on your payslip. Employer contribution (paid by the company directly into your SIPP): the company pays the gross amount; there is no National Insurance and nothing on your personal tax return, and it reduces the company's profit before Corporation Tax. Enter the amount the company pays. For a director this is usually the most efficient of the three. If you are not sure which you have, your pension provider's welcome letter or your payslip will say.

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Dividends count as income for student loan repayments once your unearned income is over £2,000 in the year. HMRC then charges 9% (6% for a Postgraduate Loan) of everything above your plan's threshold, on your total income, through Self Assessment. Because a director's £12,570 salary is below every threshold, nothing is taken through payroll, so the whole repayment lands in the January bill. Repayments are not included in payments on account.

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Dividends count towards the income test for the High Income Child Benefit Charge. Above £60,000 of total income some Child Benefit is clawed back through your tax return, all of it by £80,000. Only the higher earner in a couple is counted.

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Dividends are taxed at the same UK rates everywhere, but Scottish rates apply to your salary and other income, which can change where your dividends sit. Choose Scotland if your tax code starts with an S.

Assumptions
  • Tax year 2026/27: dividend allowance £500. Dividend rates: 10.75% basic rate (total income up to £50,270), 35.75% higher rate (£50,270 to £125,140), 39.35% additional rate (above £125,140).
  • Salary and other income are taxed first; dividends sit on top. Personal Allowance tapers above £100,000 of total income.
  • Dividend tax is paid through Self Assessment, not payroll. Payments on account apply when the bill is over £1,000.
  • Pension contributions follow the method chosen: relief at source (grossed up by 20%, bands extended), net pay (deducted from salary before tax) or employer contribution (no personal tax effect; saves the company Corporation Tax at 19%, an effective 26.5% or 25% depending on its profits).
  • Student loan repayments: 9% (6% for a Postgraduate Loan) of total income above your plan's threshold once unearned income is over £2,000, collected through Self Assessment and excluded from payments on account.
  • Ignores other reliefs. Figures are worked to the penny: each amount is rounded to the nearest penny as it is calculated, and every later figure is built from those amounts, so every line adds up exactly. HMRC's own systems may round some figures down to whole pounds, which can differ by a few pence. Illustrative, not advice.

Your dividends

Dividend tax for 2026/27

£3,999.00

to pay through Self Assessment, 10.61% of your dividends

Dividends taken
£37,700.00
Tax-free (dividend allowance)
£500.00
Taxed at 10.75% (basic)
£37,200.00 → £3,999.00
Dividends after tax
£33,701.00

Every extra £1 of dividend above this level costs you 35.75p in tax.

£0.00
left at 10.75%. Your next £1 of dividend is taxed at 35.75%
Your salary and dividends reach the £50,270 higher rate threshold to the pound, so you have used every pound of the basic rate band. From here dividends are taxed at 35.75% (higher rate) for the next £87,440.00, then 39.35% (additional rate) above £125,140 of total income. The three dividend rates for 2026/27: 10.75% (basic rate, total income up to £50,270), 35.75% (higher rate, up to £125,140), 39.35% (additional rate, above £125,140).

When you pay it

Your Self Assessment schedule

Because the bill is over £1,000, HMRC also asks for payments on account towards next year. If this is your first year in Self Assessment:

31 January 2028

The full £3,999.00 for 2026/27, plus a first payment on account of £1,999.50 towards 2027/28.

£5,998.50
31 July 2028

Second payment on account towards 2027/28.

£1,999.50
31 January 2029 onwards

The balance for 2027/28 plus the first payment on account for 2028/29. The pattern then repeats each year. If you already pay on account, HMRC will have collected estimates in 2027 and you settle only the difference.

Show the workings
Total income£12,570.00 salary + £37,700.00 dividends£50,270.00
Personal Allowanceused first by salary£12,570.00
Salary that is taxable£12,570.00 − £12,570.00 allowance (UK rates, paid via payroll or elsewhere, not shown here)£0.00
Dividend allowancefirst £500.00 of the remaining dividends at 0%£500.00
Basic rate dividendsthe basic rate band ends at £37,700 of taxable income£37,200.00 × 10.75% = £3,999.00
Tax to pay through Self Assessment£3,999.00
Dividends after tax£33,701.00

Remember the company has already paid Corporation Tax on the profit these dividends come from: 19% on profits up to £50,000, 25% on profits over £250,000, and an effective 26.5% on each pound in between because of marginal relief.

Calculated at sjecapital.co.uk/dividend-tax-calculator. Illustrative, not advice. SJE Capital Limited, company no. 15837169.

Deciding how much salary to take alongside dividends? Use the director take-home calculator, or read why £12,570 is usually the right salary, and when it is not.

Want the dividends done properly?

Every SJE Capital plan covers the salary and dividend mix, the paperwork for each dividend, and your Self Assessment return, with the January bill forecast months ahead. Free initial conversation.

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