💰 £500 Allowance · 8.75% / 33.75% / 39.35% · 2025/26
Dividend Tax
Calculator 2025/26
Calculate exactly how much tax you pay on dividends in 2025/26 — essential for limited company directors paying themselves through salary and dividends.
What is the dividend allowance for 2025/26?
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The dividend allowance for 2025/26 is £500. This means the first £500 of dividend income is tax-free each year, regardless of your other income. This was reduced from £1,000 in April 2024 and from £2,000 in April 2023.
How are dividends taxed in 2025/26?
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After the £500 allowance, dividends are taxed based on your total income tax band: 8.75% in the basic rate band (up to £50,270 total income), 33.75% in the higher rate band (£50,271–£125,140) and 39.35% in the additional rate band (above £125,140).
Do I pay National Insurance on dividends?
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No. Dividends are not subject to National Insurance, which is one of the key tax advantages of operating through a limited company and taking income as dividends rather than salary.
How do I pay tax on dividends?
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If dividend income is above the £500 allowance you must report it via self-assessment. HMRC does not automatically deduct tax from dividends — you are responsible for declaring and paying the tax by 31 January following the end of the tax year.