● 2026/27 · New higher dividend rates

Dividend Tax Calculator

Q: What is the dividend allowance for 2026/27?

The dividend allowance for 2026/27 is £500. The first £500 of dividends is tax-free regardless of your other income; only dividends above £500 are taxed.

Q: What are the dividend tax rates for 2026/27?

For 2026/27 the dividend tax rates rose in April 2026 to 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers and 39.35% for additional-rate taxpayers, charged on dividends above the £500 allowance.

On £12,570 of other income plus £20,000 of dividends you pay £2,096.25 in dividend tax for 2026/27 — the first £500 is free under the dividend allowance, and the rest is taxed across the 10.75%, 35.75% and 39.35% bands. Enter your figures to see your own breakdown.

🧾 Band-by-band breakdown 💷 £500 allowance applied 📅 2026/27 rates (rose Apr 2026)

Calculate your dividend tax

England, Wales & Northern Ireland · 2026/27

Other (non-dividend) income salary, pension, etc.

Dividend income per year

Dividend tax for 2026/27

£0

on of dividends · tax-free

Band	Dividends	Tax
Tax-free (allowance)	£0	£0
Basic rate (10.75%)	£0	£0
Higher rate (35.75%)	£0	£0
Additional rate (39.35%)	£0	£0
Total dividend tax		£0

Dividend tax only — this excludes Income Tax and National Insurance on your other income. See the wider picture with the income tax calculator.

How dividend tax works in 2026/27

Dividends are taxed as the top slice of your income. The calculator first uses up your other (non-dividend) income against the Personal Allowance and basic-rate band, then stacks your dividends on top to decide which band each part falls into. Everyone gets a £500 dividend allowance that is tax-free, no matter how much you earn — only dividends above £500 are taxed.

Rates rose in April 2026. The 2026/27 dividend rates are higher than before: 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band. These are charged on dividends above the £500 allowance, so even basic-rate shareholders pay more than in earlier years.

Band	Where your dividends sit (2026/27)	Dividend rate
Dividend allowance	First £500 of dividends	0%
Basic rate	Within the basic band (up to £50,270 total income)	10.75%
Higher rate	£50,271 – £125,140 total income	35.75%
Additional rate	Over £125,140 total income	39.35%

Worked examples for 2026/27

Here is how the calculator arrives at the tax in two common cases:

£12,570 other income + £20,000 dividends → £2,096.25. The first £500 of dividends is free under the allowance. The remaining £19,500 all sits inside the basic-rate band (total income is still under £50,270), so it is taxed at 10.75% = £2,096.25.

£50,270 salary + £10,000 dividends → £3,396.25. A £50,270 salary fills the entire basic-rate band, so the dividends start in the higher band. The first £500 is free; the remaining £9,500 is taxed at 35.75% = £3,396.25.

Because dividends stack on top of your other income, a small pay rise or extra dividend can push part of your dividends from the 10.75% band into the 35.75% band — which is why modelling it before you declare a dividend matters.

Ways to reduce dividend tax

Several legitimate steps reduce the tax you pay on dividends:

Use the £500 allowance every year — it cannot be carried forward, so unused allowance is lost.
Hold shares in a Stocks & Shares ISA — dividends inside an ISA are completely tax-free. Try the ISA calculator to plan contributions.
Use a spouse’s allowance and lower band — transferring shares to a lower-earning partner can keep more dividends in the 10.75% band.
Pension contributions — these extend your basic-rate band, keeping more dividends at the lower rate.

Figures and rates are taken from GOV.UK — Tax on dividends ↗ for the 2026/27 tax year.

Dividend Tax FAQs

How much tax will I pay on £20,000 of dividends?

If you have £12,570 of other income and £20,000 of dividends, you pay £2,096.25 in 2026/27. The first £500 is free under the dividend allowance, and the remaining £19,500 is taxed at the 10.75% basic rate because it all sits within your basic-rate band. With higher other income, more of the dividends would fall into the 35.75% band.

What is the dividend allowance for 2026/27?

The dividend allowance is £500. The first £500 of dividends is tax-free regardless of your other income — only dividends above £500 are taxed.

What are the dividend tax rates for 2026/27?

The rates rose in April 2026 to 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate), charged on dividends above the £500 allowance.

Does this include Income Tax and National Insurance?

No — this tool shows dividend tax only. Income Tax on your salary or pension is separate; see the income tax calculator. National Insurance is not charged on dividends.