Income Details
£
Gross salary before tax
£
Total dividends received
£
About Dividend Tax
How Dividends Are Taxed

Dividends are added to your other income and taxed at special rates. The first £500 of dividends is tax-free (dividend allowance), then taxed based on which income tax band they fall into.

Dividend Tax Rates 2026/27
  • Basic Rate Band: 10.75%
  • Higher Rate Band: 35.75%
  • Additional Rate Band: 39.35%
Tax-Efficient Salary & Dividend Strategy

Many company directors pay themselves a small salary (often £12,570) to use their personal allowance, then take additional income as dividends for tax efficiency.

2026/27 Tax Bands
Personal Allowance£12,570
Basic Rate£12,571-£50,270
Higher Rate£50,271-£125,140
Additional RateOver £125,140
Quick Examples