Dividend Tax Calculator. Salary + dividends, properly stacked.
The classic director combo: low salary plus dividends. We apply the £12,570 Personal Allowance, the £500 dividend allowance, and stack the rest through basic (8.75%), higher (33.75%) and additional (39.35%) rates — live as you drag the sliders.
Most directors set this at the £12,570 Personal Allowance.Going above PA triggers income tax + employee NIC on the salary slice above £12,570 — which usually nets less than the same amount taken as dividends. The £12,570 figure is the salary sweet-spot for 2025/26.
Gross dividends drawn from distributable profits.First £500 tax-free (Dividend Allowance, halved from £1,000 in 2024/25). Then 8.75% basic / 33.75% higher / 39.35% additional — based on where the dividends land in your overall income stack.
- Salary£12,570
- Dividends£40,000
- Total drawn£52,570
- Dividend tax (after £500 allowance)−£3,906
- Total tax−£3,906
- Net to you£48,664
- Net to you£48,664
- Income tax£0
- Dividend tax£3,906
Estimator assumes no other income, no pension contributions, no student loan, no Scottish-rate-payer status. Real director tax planning also weighs accumulated reserves, ER/BADR exit relief, and pension carry-forward — book a call if you want the full picture.