UK Dividend Tax Calculator
Calculate your dividend tax liability and net income for 2025/26 tax year
Select the relevant tax year
£
Your annual employment income before tax
£
Total gross dividend income for the year
Tax Calculation Summary
Total Taxable Income
£30,000
Total Income
£42,570
Tax & National Insurance
Income Tax
£0
Employee's National Insurance
£0
Dividend Tax
£2,606
Total Personal Tax
£2,606
Net Income
Net Salary
£12,570
Net Dividends
£27,394
Total Net Income
£39,964
Employer Costs
Employer's National Insurance
£0
Total Employment Cost
£12,570
Tax Breakdown Visualisation
UK Dividend Tax Rates 2025/26
| Tax Band | Income Range | Dividend Tax Rate | Income Tax Rate |
|---|---|---|---|
| Basic Rate | £0 - £37,700 | 8.75% | 20% |
| Higher Rate | £37,701 - £125,140 | 33.75% | 40% |
| Additional Rate | £125,140+ | 39.35% | 45% |
Key Allowances & Thresholds 2025/26
- Personal Allowance: £12,570
- Dividend Allowance: £500 (tax-free)
- National Insurance Threshold: £12,570
- Higher Rate Threshold: £50,270 (£37,700 + personal allowance)
How Dividend Tax Works
Dividend tax is charged on dividend income above the £500 annual allowance. The tax rates are lower than income tax rates because companies have already paid corporation tax on their profits.
- Basic rate taxpayers pay 8.75% on dividends
- Higher rate taxpayers pay 33.75% on dividends
- Additional rate taxpayers pay 39.35% on dividends
Company Director Tax Planning
Company directors can optimise their tax position by taking a combination of salary and dividends. The optimal salary is typically at the National Insurance threshold.
- Take salary at NI threshold (£12,570) to maximise NI credits
- Pay remaining income as dividends to save on National Insurance
- Consider spouse shareholdings for income splitting
- Time dividend payments around tax year-end
National Insurance Savings
Dividend income is not subject to National Insurance contributions, making it more tax-efficient than salary for company directors above the NI threshold.
- No employee's NI (12%) on dividend income
- No employer's NI (13.8%) on dividend income
- Significant savings on income above £12,570
- Consider pension contributions for additional tax relief
Tax Year 2025/26 Changes
Key changes affecting dividend taxation for the 2025/26 tax year and planning considerations for taxpayers.
- Dividend allowance remains at £500
- Frozen personal allowance at £12,570
- Higher rate threshold frozen at £50,270
- Plan for fiscal drag effects