UK Dividend Tax Calculator
Calculate tax on dividends alongside your salary. See the tax advantage of the salary/dividend split used by company directors and shareholders. 2025/26 rates.
Dividend tax
£4,031
Gross employment income before tax. Directors: typically set to the NI threshold (£12,570) or NI primary threshold.
Dividend tax
£4,031
Effective dividend rate: 10.08% · Next £1 taxed at 33.75%
Total income
£52,570
Total tax
£4,031
Take-home pay
£48,539
| Dividend band | Amount | Rate | Tax |
|---|---|---|---|
| Dividend allowance | £500 | 0% | £0 |
| Basic rate | £37,200 | 8.75% | £3,255 |
| Higher rate | £2,300 | 33.75% | £776.25 |
| Total dividend tax | £4,031.25 | ||
| Tax breakdown | Amount |
|---|---|
| Total income (salary + dividends) | £52,570 |
| Personal allowance | -£12,570 |
| Dividend tax | -£4,031.25 |
| Take-home pay | £48,539 |
Monthly take-home
£4,045
Effective total tax rate
7.67%
Salary vs dividend split advantage
Taking £52,570 entirely as salary would cost £11,522 in tax. Your salary/dividend split saves you £7,491 per year (£624/month).
Dividends avoid National Insurance (saving 8-10%) and are taxed at lower rates than salary (8.75% vs 20% basic, 33.75% vs 40% higher). This is why company directors typically take a small salary and the rest as dividends.
Director salary tip: You've set your salary at or below the personal allowance (£12,570). This is the most common director strategy — no income tax or NI on salary, and dividends benefit from the dividend allowance and lower tax rates.