Calculator 03 · 2026/27 tax year · new rates
For limited company directors paying yourself dividends. Uses the new 2026/27 rates of 10.75% (basic), 35.75% (higher) and 39.35% (additional) that took effect on 6 April 2026. Enter your annual salary plus the dividends you want to take.
This is personal tax only. Corporation tax happens before dividends are available.
CT calculatorDividends are taxed on top of your other income. Salary uses your personal allowance first. Then dividends stack on top — using the £500 dividend allowance, then the relevant band rates.
0% on the first £500 (dividend allowance — uses up part of whatever band you're in).
10.75% on dividends in the basic rate band (combined income up to £50,270).
35.75% on dividends in the higher rate band (£50,271 to £125,140).
39.35% on dividends above £125,140 (additional rate, unchanged).
The £500 dividend allowance is taxed at 0%, but it still uses up part of your basic or higher rate band. So if you're earning £50,000 in salary and take £1,000 of dividends, the £500 allowance pushes you into the higher rate band sooner than you might expect.
Per £1,000 of dividends in the basic rate band, you now pay £107.50 vs £87.50 before — an extra £20. In the higher rate band, you pay £357.50 vs £337.50 — same £20 extra. A director taking £50,000 of dividends pays roughly £1,000 more tax per year compared to 2025/26.
The salary/dividend mix that minimises tax depends on your specific position — corporation tax band, pension contributions, other income, partner's tax position. Worth a 20-minute call to model it properly.
Book a free 20-min callYes. The calculator uses 10.75% (basic), 35.75% (higher) and 39.35% (additional) — the rates that took effect on 6 April 2026 per the Autumn 2025 Budget. If you took a dividend on or before 5 April 2026, the old rates apply (8.75% / 33.75%).
The first £500 of dividends is taxed at 0%, but it still counts toward which band you fall into. It does not give you an extra £500 of tax-free room on top of your other allowances. It is a nil-rate band, not an additional allowance.
Your £12,570 personal allowance applies to salary first. If your salary is below £12,570, the unused portion of your PA reduces the amount of dividends that get taxed. If your total income exceeds £100,000, your PA tapers and dividends in that tapered range face a punishing effective rate.
This calculator is for limited company directors taking dividends from their own company. If you are paid through PAYE (employee or umbrella), use the Take-Home Pay Calculator instead.
From April 2027 basic income tax rises 20→22%, higher 40→42%, additional 45→47%. Dividend rates are already at their new 2026/27 levels. The 2027 changes affect dividend tax indirectly because the band thresholds (£12,570, £50,270, £125,140) remain in the same place. We will update the calculator at that point.