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Free tool · Dividends

Dividendtax.

Enter your salary and dividends to see exactly how much falls in each band and what you'll owe for 2025/26.

£

Salary, self-employed profit, rent and pensions. Directors often take £12,570.

£

The total of all dividend vouchers, from your own company and from shares.

Dividend tax for 2025/26

Illustrative estimate

£0.00

Effective rate on your dividends 10.1%
Dividend allowance (0%)£0.00
Basic rate band at 8.75%£0.00
Higher rate band at 33.75%£0.00
Tax on dividends£0.00

The rows above are slices of your dividends, not tax. Dividends sit on top of your other income, so a higher salary pushes more of them into the 33.75% band.

Illustrative estimate for England, Wales & NI. Ignores savings interest and pension contributions.

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Estimated dividend tax £4031.25

How dividend tax works

Dividends are taxed differently from salary. You don't pay National Insurance on them, and the rates are lower than income tax rates. But they're added on top of your other income, so the band they land in depends on what else you earn.

  • Personal allowance: any of the £12,570 your other income doesn't use can cover dividends at 0%.
  • Dividend allowance: the next £500 of dividends is taxed at 0%, but still uses up band space.
  • Basic rate band: 8.75% up to £50,270 of total income.
  • Higher rate band: 33.75% from £50,270 to £125,140.
  • Additional rate: 39.35% above £125,140.

Worked example: a director on £12,570 salary

Priya pays herself a £12,570 salary and takes £40,000 of dividends in 2025/26. The salary uses her whole personal allowance. The first £500 of dividends is tax-free. The next £37,200 fills the rest of her basic rate band at 8.75% (£3,255), and the final £2,300 is in the higher rate band at 33.75% (£776.25). Her dividend tax is £4,031.25, about 10% of her dividends.

Over £100,000

Your personal allowance shrinks by £1 for every £2 of income over £100,000, and dividends count towards that. The calculator applies the taper automatically, which is why the effective rate jumps sharply between £100,000 and £125,140.

Reporting dividends

Dividends over £10,000 mean you need to file a Self Assessment return. Not sure if you need one? Use our free checker. With TaxGo you upload your dividend vouchers and we add them up and work out the tax for you.

Questions

Asked and answered.

01

How much dividend can I take tax-free in 2025/26?

The first £500 of dividends is covered by the dividend allowance. If your other income is below the £12,570 personal allowance, the unused part of the allowance also covers dividends, so someone with no other income can receive £13,070 of dividends tax-free.

02

What are the dividend tax rates for 2025/26?

8.75% in the basic rate band, 33.75% in the higher rate band and 39.35% in the additional rate band. These are unchanged from 2024/25.

03

Do I need to file a tax return for dividends?

If your dividends are over £10,000 you need to file a Self Assessment return. Between £500 and £10,000 you can ask HMRC to collect the tax through your tax code instead, or report it on a return if you already file one.

04

Why does my salary change my dividend tax?

Dividends are treated as the top slice of your income. The more salary or other income you have, the more of your dividends fall into the higher rate band, where the rate jumps from 8.75% to 33.75%.

05

When do I pay dividend tax?

Through Self Assessment, by 31 January after the end of the tax year. For 2025/26 dividends that's 31 January 2027, and you may also have payments on account for the following year.

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