Skip to main content

Dividend tax calculator UK

Dividend tax calculator

Use our interactive calculator to work out how much tax you'll pay on your dividend earnings.

£
£

Please note that the results you see on your screen are estimates only.

Please note that the results you see on your screen are estimates only.

How does the dividend tax calculator work?

If you own shares in your limited company, you may choose to take out dividends as well as paying yourself a salary. 

A dividend is a form of payment made to shareholders from the profits of a limited company. The money is found once all business expenses and liabilities (including tax and VAT) have been covered. This ‘retained profit’ may have been accumulated over a period of time and any excess profits not distributed as dividends simply remain in the company’s bank account. You can choose to pay yourself dividends as frequently as you want, but most companies distribute them quarterly or every six months after working out how much the company can afford to pay.

Choosing when and how much you choose to pay out in dividends will impact on the amount of tax you need to pay to HMRC. Our in-depth article on dividends provides more information on this. 

Our calculator will work out how much tax you’ll pay based on the salary you draw and your dividend earnings. You won’t pay tax on the first £2,000 of dividends that you get in the tax year. 

Above this allowance, the tax you pay depends on which Income Tax band you’re in.

For the 2021/22 tax year, the tax payable on dividends is as follows:

Tax band Tax rate on dividends over £2,000
Basic rate (and non-taxpayers) 7.5% on earnings up to £37,500.
Higher rate 32.5% on earnings above the basic rate up to £150,000.
Additional rate 38.1% on earnings above £150,000.

Why use our salary dividend calculator?

Our dividend calculator should be used as a rough guide to how much tax you’ll pay on your salary and dividend earnings. This can be a helpful reference when working out when and how much money to draw from your limited company in the tax year. 

As with anything involving company finances and tax liabilities, it’s always worth consulting with either your own finance team or working with an accountant. Paying yourself with dividends can offer tax advantages, but operating as a limited company in order to take advantage of this might not be appropriate for your situation. For more information on operating a limited company and drawing dividends, check out the following articles:

Share this content

Brought to you by:

AAT Skills Store

A leading player in the world of accounting and finance training, AAT qualifications have been studied by hundreds of thousands of professionals all over the world, representing businesses across the spectrum.

AAT Skills Store is a new way to engage with AAT’s award winning learning materials. Through this dedicated store you’ll be able to purchase a growing selection of interactive online finance courses designed to help you upskill without setting foot in a classroom. 

Visit partner's website

Register with Informi today:

  • Join over 20,000 like-minded business professionals
  • Create your own personalised account with curated reading lists and checklists
  • Access exclusive resources including business plans, templates, and tax calculators
  • Receive the latest business advice and insights from Informi
  • Join in the discussion through the comments section

or

I’ve been working through the how to start a business in 20 days ebook and so many of the things I’d done are now nicely tied together and some gaps now filled. I love the simplicity. Thank you.

Sarah Gosling – Gosling Charity Consulting

I love receiving my Informi emails. They’re always well written and engaging.

Jennifer Hobson – JEH Bookkeeping

Coronavirus (Covid-19)The latest business guidance and support