The real tax on your dividends.
Salary plus dividends, with the £500 dividend allowance and the 8.75% / 33.75% / 39.35% bands applied in order — see exactly how much HMRC takes.
How the tax is built up
| Band | Amount | Rate | Tax |
|---|---|---|---|
| Basic rate (8.75%) | £14,500 | 8.75% | £1,269 |
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What you might calculate next
How it works
Dividend allowance
The first £500 of dividends in a tax year is taxed at 0%. Down from £1,000 (2023/24) and £2,000 (pre-2023). Stacks on top of any unused Personal Allowance.
How rates apply
Dividends are taxed AFTER other income. So PAYE salary fills up your Personal Allowance and basic-rate band first, and dividends are taxed at the rates of whichever band they fall into.
Basic rate · 8.75%
On dividend income falling within the basic-rate band (£12,570 – £50,270 of total income).
Higher rate · 33.75%
On dividend income falling between £50,270 and £125,140 of total income.
Additional rate · 39.35%
On dividend income above £125,140 of total income. Personal Allowance is fully tapered out by this point.
How to pay
Through Self Assessment. Register with HMRC by 5 October after the tax year, file by 31 January and pay any tax due by 31 January. Dividends inside an ISA or pension are tax-free.