What will your dividends cost you?
Dividend tax rose on 6 April 2026. This uses the new rates, and shows you what the same dividends would have cost under the old ones.
Salary, pension or rent, before tax. This sets the band your dividends fall into.
The total for the tax year, before any tax.
Rates are 2026/27 for England, Wales and Northern Ireland. Scotland sets its own income tax rates on salary, but dividend tax rates are the same across the UK, so the dividend figure here holds either way.
It assumes the dividends are paid to you as an individual outside an ISA or pension, with no other allowances or reliefs in play. Dividends inside an ISA are tax free and are not counted here.
It shows the tax on your dividends, not the corporation tax your company paid on the profit before it could declare them.
Also free: see what a salary is worth after tax if you pay yourself one alongside dividends, or check whether AI knows your business exists. All our free tools.
Two points on, from 6 April 2026.
The allowance and the bands stayed put. Only the rates moved, which is why the same dividends now cost more.
Was 8.75%. Applies in the basic rate band.
Was 33.75%. Applies in the higher rate band.
Unchanged, on income above £125,140.
Unchanged. Taxed at zero, but it still uses up band.
Dividends and the tax on them.
How much tax do I pay on dividends in 2026/27?
Dividends above the £500 allowance are taxed at 10.75 per cent while they fall in the basic rate band, 35.75 per cent in the higher rate band and 39.35 per cent above that. Which band applies depends on your other income, because dividends are treated as the top slice of what you earn.
Why did my dividend tax go up in April 2026?
The dividend ordinary rate rose from 8.75 to 10.75 per cent and the upper rate from 33.75 to 35.75 per cent on 6 April 2026, an increase of two percentage points each. The additional rate stayed at 39.35 per cent. Nothing else changed, so the same dividends now cost more tax than they did last year.
What is the dividend allowance for 2026/27?
It is £500. The first £500 of dividend income is taxed at zero per cent, but it still uses up part of whichever band it falls in, so it reduces your tax bill rather than pushing other income down into a lower band.
Do dividends use up my personal allowance?
They can. Your personal allowance is set against your income generally, so if your salary or other income does not use all of it, the remainder covers dividends before any dividend tax is charged. If your total income passes £100,000 the allowance starts to disappear at £1 for every £2 above it.
Do I pay national insurance on dividends?
No. Dividends are not earnings, so no national insurance is due on them from you or your company. That is a large part of why taking profit as dividends rather than salary has been attractive, though the April 2026 rate rise narrows the gap.
Built by an accountant, not a content farm.
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