Easily estimate your dividend tax obligations for the 2025/26 tax year using our free calculator—ideal for limited company owners.
Dividend Tax Calculator
Calculate your dividend tax liability based on your dividend income.
Dividend Tax Calculation ()
| Description | Amount (£) |
|---|---|
| Original Dividend Income | |
| Dividend Allowance | |
| Taxable Dividend Income | |
| Dividend Tax Rate | |
| Dividend Tax Liability |
2025/26 Dividend Tax Rates:
| Tax Band | Dividend Income Range | Tax Rate |
|---|---|---|
| Basic Rate | £0 – £37,700 | 8.75% |
| Higher Rate | £37,701 – £125,140 | 33.75% |
| Additional Rate | Over £125,140 | 39.35% |
Note: The first £500 of dividend income is tax-free due to the dividend allowance. However, this allowance still counts towards your basic rate tax band.
2025/26 Salary Taxation:
- Income Tax:
- £0 – £12,570: 0% (Personal Allowance)
- £12,571 – £50,270: 20%
- £50,271 – £125,140: 40%
- Over £125,140: 45%
Note: The Personal Allowance decreases by £1 for every £2 earned over £100,000
- Employee's NI Contributions:
- £12,570 – £50,270: 8%
- Over £50,270: 2%
- Employer's NI Contributions:
- Over £5,000: 15%
Optimal Salary for Directors:
For tax efficiency, many directors opt for a salary of £12,570 in 2025/26. Alternatively, a salary of £6,500 still qualifies for State Pension benefits and may simplify administrative tasks.
Assumptions:
- Calculations apply to England and Wales (excluding Scotland)
- Only salary and dividend incomes are considered
- Assumes a tax code of 1257L with full Personal Allowance entitlement
- Excludes Employment Allowance, as most small limited companies do not qualify
Please consult with your accountant for personalized advice, especially if you have additional income sources or specific circumstances.