FREE TOOL · 2024/25 & 2025/26

UK Dividend Tax Calculator

The dividend allowance fell to just £500 - so many investors now owe tax. See exactly how much you owe on your dividends, and how much an ISA would save you.

£
Salary, self-employment, pension etc. (before tax)
£
Total gross dividends for the year
Dividend tax you owe
£393.75
Effective rate 7.88% · net dividend £4,606.25
Basic rate (8.75%)£4,500 taxed£393.75
Dividend allowance£500 tax-free£0
In a Stocks & Shares ISA these dividends would be completely tax-free - saving you £393.75 this year.

Estimate for 2024/25–2025/26 English/Welsh/NI rates. Assumes standard personal allowance (tapered above £100,000). Not tax advice - confirm with HMRC or an accountant.

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Frequently asked

How much tax do I pay on dividends in the UK?

After a £500 tax-free dividend allowance (2024/25), dividends are taxed at 8.75% if they fall in the basic rate band, 33.75% in the higher rate band and 39.35% in the additional rate band. Dividends are treated as the top slice of your income, so the rate depends on your other income too.

What is the dividend allowance for 2024/25?

The tax-free dividend allowance is £500 for 2024/25 and 2025/26. It was cut from £2,000 in 2022/23 to £1,000 in 2023/24 and then £500 - which is why many small investors now owe dividend tax for the first time.

What are the UK dividend tax rates?

Basic rate: 8.75%. Higher rate: 33.75%. Additional rate: 39.35%. These apply to dividends above the £500 allowance, based on which income tax band the dividends fall into once stacked on top of your other income.

Do I pay tax on dividends in an ISA or SIPP?

No. Dividends from shares and funds held inside a Stocks & Shares ISA or a SIPP are completely tax-free - no dividend tax and no reporting. Tick the "held in ISA/SIPP" box to see how much tax you would save by sheltering the same dividends.

How is dividend tax calculated (top-slice rule)?

Your personal allowance (£12,570, tapered above £100,000) covers your non-dividend income first. Dividends then sit on top of your other income; the part falling in the basic band is taxed at 8.75%, the higher band at 33.75%, and so on. The £500 allowance is applied to the lowest band first. This calculator does all of that for you.

When do I need to report dividends to HMRC?

If your dividends are over £500 but under £10,000, you can usually ask HMRC to change your tax code or report via Self Assessment. Over £10,000 you must file a Self Assessment return. Dividends inside an ISA never need reporting. This is an estimate - confirm with HMRC or an accountant.