Income tax on a director salary plus dividends for 2026-27, band by band
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 17 Oct 2026.A director paid a £12,570 salary uses the Personal Allowance on pay, so dividends start in the basic rate band. On £40,000 of dividends the first £500 is free, £37,200 is taxed at 10.75% and £2,300 at 35.75%: £4,821.25 in all. Change both figures to see where the higher rate starts.
Cash dividends received from 6 April 2026 to 5 April 2027, outside an ISA or pension.
Salary, pension, rental profit or self-employed profit before tax. Leave out savings interest.
£4,821.25
You keep £35,178.75 of £40,000.00 in dividends.The £500 dividend allowance is taxed at 0% but still uses up part of your band, so it can push other dividends into a higher band.
Tell HMRC if your dividends exceed your unused Personal Allowance and the £500 allowance.
Not included: savings interest, Scottish rates on wages, Marriage and Blind Person’s Allowance, pension and Gift Aid relief.
GOV.UK dividend and income tax rates for 6 April 2026 to 5 April 2027, checked 17 Oct 2026. An estimate.
| Total income | £52,570.00 |
| Personal Allowance | £12,570.00 |
| Other income after the allowance | £0.00 |
| Income tax on other income (20%, 40%, 45%) | £0.00 |
| Dividends inside the Personal Allowance | £0.00 |
| Slice | Amount | Rate | Tax |
|---|---|---|---|
| Dividend allowance | £500.00 | 0% | £0.00 |
| Basic rate | £37,200.00 | 10.75% | £3,999.00 |
| Higher rate | £2,300.00 | 35.75% | £822.25 |
| Dividend tax | £4,821.25 | ||
| Total income tax | £4,821.25 | ||
2026-27 · Rates and rules read from the sources listed on this page (the earliest on 17 Oct 2026); they may have changed since.
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This calculator works out the income tax on dividends for the tax year from 6 April 2026 to 5 April 2027, from HMRC's pages on GOV.UK: tax on dividends, and Income Tax rates and Personal Allowances.
The order. Your other income (salary, pension, rent, trading profit) uses the £12,570 Personal Allowance first. Any allowance left over covers dividends. Above £100,000 of total income the allowance falls by £1 for every £2, and it is gone at £125,140.
A director's pay. With a £12,570 salary and £40,000 of dividends the tax is £4,821.25: 10.75% on £37,200 and 35.75% on £2,300.
The rest of the article, and all 6 questions about UK Dividend Tax Calculator 2026-27, are on the UK Dividend Tax Calculator 2026-27 page.
Dividends above the £500 dividend allowance are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band, from 6 April 2026. Dividends inside your unused £12,570 Personal Allowance are not taxed at all.
Every individual has a £500 dividend allowance a year. Dividends within it are taxed at 0%, but they still count towards your income and use up part of the band they fall in, so they can push other dividends into the higher rate band.
Add your dividends to your other income. Salary and pension use the Personal Allowance and the bands first, and dividends sit on top. With £29,570 of wages and £3,000 of dividends the total is £32,570, all in the basic rate band, so the dividend tax is £268.75.
No. GOV.UK says you do not pay tax on dividends from shares in an ISA, so leave them out of this calculator. Only dividends from shares held directly or in a general investment account count towards the £500 allowance and the bands.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about UK Dividend Tax Calculator 2026-27 and anybody who knows can answer. No account needed.
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