Dividend Tax Calculator 2024/25
Calculate tax on dividends for UK business owners and investors. Includes the £500 dividend allowance and all three dividend tax rates.
Dividend Tax Calculator
2024/25 tax year — £500 dividend allowance
Salary, pension, rental income — before dividends. Enter 0 if dividends are your only income.
Total dividends received or drawn this tax year
Dividend Tax Rates 2024/25
| Band | Total income | Dividend tax rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Dividend allowance | First £500 of dividends | 0% |
| Basic rate | £12,571–£50,270 | 8.75% |
| Higher rate | £50,271–£125,140 | 33.75% |
| Additional rate | Over £125,140 | 39.35% |
Director Salary + Dividend Strategy
Many limited company directors take a small salary (typically up to £12,570 — the personal allowance, or £6,396 — the NI Secondary Threshold) and extract remaining profit as dividends. This avoids employer and employee National Insurance on the salary portion and uses the lower dividend tax rates.
Example 2024/25: Director takes £12,570 salary + £37,700 dividends. After the £500 dividend allowance, £37,200 is taxed at 8.75% = £3,255 dividend tax. Total take-home: over £45,000 on £50,000 extracted.
Important Notes
- Dividends can only be paid from post-corporation-tax profits
- Dividends must be paid in proportion to shareholding unless different share classes exist
- You must declare dividends on a Self Assessment tax return if they exceed £500
- Scottish taxpayers pay income tax at Scottish rates on non-dividend income, but UK-wide rates apply to dividends