UK Dividend Tax Calculator 2025/26
Find out exactly how much tax you owe on your dividend income — split across basic, higher, and additional rate bands — using the 2025/26 HMRC rates.
Dividend tax owed
£393.75
- Dividends taxed at 8.75%
- £4,500.00
- Dividends taxed at 33.75%
- £0.00
- Dividends taxed at 39.35%
- £0.00
- Effective rate on dividends
- 7.88%
Based on 2025/26 UK tax bands. The £500 dividend allowance applies first; the remainder is taxed at the rate matching your income band. Scottish taxpayers use the same dividend rates as the rest of the UK.
How to use this calculator
Enter the total dividend income you received in the tax year, and your other income (salary, pension, rental income, etc.) before tax. The calculator works out how much of your dividend income falls into each band and applies the correct rate. Leave other income at £0 if you only have dividend income.
How the calculation works
Dividends are taxed on top of other income. After the £12,570 personal allowance and £500 dividend allowance, the remaining dividends are taxed at: 8.75% (basic rate, income up to £50,270), 33.75% (higher rate, £50,271–£125,140), or 39.35% (additional rate, above £125,140). The calculator stacks your other income into the band first, then taxes dividends from where that stack ends.
Worked example
Salary £30,000, dividends £5,000. Non-dividend taxable income = £30,000 − £12,570 = £17,430. Basic-rate band remaining = £50,270 − £12,570 − £17,430 = £20,270. Taxable dividends = £5,000 − £500 allowance = £4,500. All £4,500 fits in the basic band → tax = £4,500 × 8.75% = £393.75.
Frequently asked questions
What is the dividend allowance for 2025/26?
The dividend allowance for 2025/26 is £500. The first £500 of dividend income each tax year is tax-free regardless of which income band you are in. This was reduced from £1,000 in 2024/25 and £2,000 in 2023/24.
Do I need to pay National Insurance on dividends?
No. Dividends are not subject to National Insurance contributions. This is one of the reasons owner-managed businesses often pay a combination of a small salary (to the NI threshold) and dividends to extract profits tax-efficiently.
How do I pay the tax I owe on dividends?
If the total dividend tax owed is under £10,000 and you are already in Self Assessment, HMRC can collect it through your tax code (deducted from salary). Otherwise you declare dividend income on your Self Assessment return each year and pay by 31 January. If your dividend income exceeds £1,000 or your total income exceeds £100,000, Self Assessment registration is required.
Are dividends inside an ISA or SIPP taxable?
No. Dividends received inside a Stocks & Shares ISA or a pension (SIPP or workplace scheme) are completely sheltered from dividend tax. Only dividends received outside these wrappers count towards your dividend allowance and are subject to the rates in this calculator.
Do Scottish taxpayers pay different dividend tax rates?
No — dividend tax rates are the same across the whole of the UK. Scotland has different income tax rates for salary and rental income, but the dividend rates (8.75%, 33.75%, 39.35%) apply to all UK taxpayers. The band at which you become a higher-rate dividend taxpayer is still £50,270, not the Scottish higher-rate threshold.
What counts as "other income" in this calculator?
Other income is any income that is not dividends: salary, self-employment profit, pension income, rental income, savings interest, and any other taxable receipts. Enter the gross (before tax) amount. PAYE salary should be entered as gross pay shown on your P60 or payslip, not the take-home amount.