See exactly how much tax you'll pay on dividends after using your £500 allowance — whether you're a basic, higher, or additional rate taxpayer.
Your Details
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Your Dividend Tax Bill — 2025–26
Total income—
Dividend allowance used—
Taxable dividends—
Band
Rate
Amount
Tax
Dividend tax owed
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Effective dividend tax rate—
Self Assessment reminder: If your dividend income exceeds £1,000 in the tax year, you must register for Self Assessment even if you owe no tax. Dividends over £10,000 always require a return.
Dividend tax — frequently asked questions
What is the dividend allowance for 2025–26?
The dividend allowance for 2025–26 is £500. This was cut from £1,000 in April 2024 and from £2,000 in April 2023. It means the first £500 of dividend income each tax year is tax-free for all taxpayers, regardless of which band they fall into.
What are the dividend tax rates for 2025–26?
Once you've used your £500 dividend allowance, dividends are taxed at: 8.75% (basic rate — total income up to £50,270), 33.75% (higher rate — £50,271 to £125,140), and 39.35% (additional rate — above £125,140). In Scotland, your income tax band is based on Scottish rates, but dividend tax rates are the same across the UK.
How are dividends stacked against my other income?
Dividends always sit on top of your other income for tax purposes. So if your salary takes you to £45,000, your dividends are taxed starting from there — the first £5,270 at basic rate and anything above at higher rate. This calculator does that stacking automatically.
Do I pay National Insurance on dividends?
No. National Insurance is only charged on employment income and self-employment profits. Dividends are entirely outside the NI system — one reason many business owners pay themselves through dividends where possible.
Do I need to do Self Assessment for dividends?
Yes, if your dividends exceed £1,000 in the tax year. You report them on a Self Assessment tax return and pay any tax owed by 31 January following the end of the tax year. HMRC won't collect dividend tax through PAYE.