Dividend Tax Calculator View other calculators

Quickly calculate the tax you need to pay on the dividends you received from your investments, or what is the best way to pay yourself (dividends or salary) if you’re a company director.

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How did you earn dividends?
Dividends earned
£
Other income
£
Your additional income affects the tax you pay on fividends (e.g salary)
Select tax year

Taxable dividends breakdown

Tax free
£2,000.00
Taxed at 7.5%
£1,000.00

Other taxable income breakdown (excluding dividends)

Tax free
£12,500.00
Taxed at 20%
£16,500.00
Total annual income
£32,000.00
Total tax
£3,375.00
Taxable dividends
£1,000.00
Dividend Tax
£75.00
Other taxable income
£16,500.00
Other income tax
£3,300.00
This does not include National Insurance
Either try calling HMRC on 0300 200 3300 so they can simply take this tax from your salary or pension, or include it in your Self Assessment tax return.

How your dividend tax is calculated

Tax on dividends is calculated pretty much the same way as tax on any other income.

The biggest difference is the tax rates – instead of the usual 20%, 40%, 45% (depending on your tax band), you’ll be taxed at 7.5%, 32.5%, and 38.1%.

The numbers look strange but the reason is simple: the company paying you those dividends already paid corporate tax, so in the end it should work out to a similar tax rate.

This is mostly relevant if you own your company and trying to decide what is the best way to pay yourself: dividends or salary. Keep in mind that for salary you also need to pay National Insurance.

In your case you earned £3,000.00 in dividends and £29,000.00 in other income (this can be salary, rent, etc.).

Income Tax

You don’t pay income tax on the first £12,500.00 that you make in other income (this excludes dividends).

You pay 20% on the first £16,500.00 after the personal allowance.

Dividend Tax

You don’t pay any dividend tax on the first £2,000.00 you make in dividends.

You pay 7.5% on the next £1,000.00

Call HMRC on 0300 200 3300 so they can change your tax code – you’ll pay the dividend tax through your salary or pension.

If you normally file a tax return, you can also pay dividend tax through it.

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Simple online tax assessment

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Our online tax-bot will go over your tax situation and will make sure you won’t overpay your taxes.

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Who our service is for

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What happens next

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