Answers · UK 2025/26
How much tax will I pay on £30,000 of dividends in 2026/27?
On £30,000 of dividends in 2026/27, the first £500 is covered by the dividend allowance. The remaining £29,500 is taxed at 10.75% if you are a basic-rate taxpayer (£3,171.25), 35.75% if higher-rate (£10,545.63), or 39.35% if additional-rate (£11,608.25).
Full answer
Dividends in 2026/27 have a tax-free dividend allowance of £500. Above that, dividends are taxed at 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band, depending on which band the dividends fall into once stacked on top of your other income. On £30,000 of dividends, £29,500 is taxable after the allowance. A basic-rate taxpayer pays 10.75% of £29,500, which is £3,171.25. A higher-rate taxpayer pays 35.75%, or £10,545.63. An additional-rate taxpayer pays 39.35%, or £11,608.25. For a company director extracting £30,000 in dividends on top of a £9,100 salary, total income of £39,100 stays within the basic-rate band, so the whole dividend amount is taxed at the lower 10.75% rate -- illustrating why keeping salary low and using dividends is a common profit-extraction strategy for owner-directors of small limited companies, provided the company has sufficient retained profit to pay a legal dividend.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.