Combine salary and dividend income in one calculator to see exactly how much dividend tax you owe — the common setup for limited company directors paying themselves a low salary plus dividends.
Dividends are taxed after salary/other income fills your Personal Allowance and lower bands — so your salary level determines which dividend band you start in. Common for limited company directors who pay themselves a low salary plus dividends.
Dividend Tax in Scotland
Dividend tax is not devolved — Scottish taxpayers pay the same dividend rates and use the same £500 dividend allowance as the rest of the UK. Only your non-dividend income (salary) is taxed at Scottish Income Tax rates, and that changes how much of your Personal Allowance and basic-rate band is left for dividends to sit in. So a Scottish director and an English director on an identical salary-plus-dividend split can still land on a slightly different total bill.
Get Your Books & Tax Handled Properly
This calculator gives an estimate — but self-employed and dividend income both come with Self Assessment obligations, allowable expenses, and filing deadlines that are easy to get wrong without support.
New to self-employment or a limited company: get set up correctly from day one — VAT registration, expense tracking, Self Assessment.
Mixed salary + dividend income: an accountant can model the most tax-efficient salary/dividend split for a director-shareholder.
Approaching a filing deadline: avoid late-filing penalties with a fixed-fee online accountant.
Growing side income: know exactly when you cross into needing to register for Self Assessment.
Online accountants like Crunch, Osome and Tide Accounting handle Self Assessment and limited company filings at a fixed monthly fee, built for freelancers and small companies.
The first £500 of dividend income each tax year is tax-free, regardless of your other income.
How are dividends taxed if I also have a salary?
Dividends are treated as the top slice of your income — your salary and other income use up the Personal Allowance and lower tax bands first, and dividends are taxed at whichever band they fall into above that.
Why do company directors take a low salary plus dividends?
Dividends aren't subject to National Insurance, so a low salary (often around the Personal Allowance) plus dividends is typically more tax-efficient than an equivalent full salary — subject to Corporation Tax already paid on company profits.
What are the dividend tax rates for 2026/27?
Above the £500 dividend allowance: 10.75% basic rate, 35.75% higher rate, 39.35% additional rate. The ordinary and upper rates each rose by 2 percentage points from 6 April 2026, announced in the 2025 Autumn Budget; the additional rate was unchanged.
Is dividend tax different in Scotland?
No — dividend tax rates and the £500 dividend allowance are set UK-wide and are identical in Scotland. Only your salary is taxed at Scottish Income Tax rates, which can slightly change which band your dividends fall into.