Dividends are taxed on top of your other income, after a £500 allowance. Enter your salary and dividends to see the tax, the band split, and what you keep.
Dividend tax = (your dividends − the £500 allowance) taxed at the dividend rate for the band they fall in.
Dividends are treated as the top slice of your income. Your salary and other income use up the personal allowance (£12,570) and the tax bands first; then the first £500 of dividends is tax-free, and the rest is taxed at 10.75% within the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. Because they stack on top, the same dividend can be split across two rates. Dividends pay no National Insurance, and dividends inside an ISA are completely tax-free.
Sources: gov.uk & HMRC (dividend allowance and rates, 2026/27). Illustrative; assumes England/Wales/NI rates, a standard tax code and no other allowances or reliefs.
Illustrative only, not financial or tax advice. Assumes England, Wales or NI rates, a standard personal allowance and tax code, dividends as your top slice of income, and no other reliefs. Scottish taxpayers pay Scottish rates on non-dividend income but the same UK dividend rates. Always check gov.uk or speak to an accountant.
Pairs with Capital Gains Tax and Take-Home Pay.