Answers · UK 2025/26
How much tax will I pay on £80,000 of dividends in 2026/27?
On £80,000 of dividends in 2026/27, the first £500 is covered by the dividend allowance. The remaining £79,500 is taxed at 10.75% if you are a basic-rate taxpayer (£8,546.25), 35.75% if higher-rate (£28,421.25), or 39.35% if additional-rate (£31,283.25).
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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 £80,000 of dividends, £79,500 is taxable after the allowance. If it all falls in the basic-rate band the tax is £8,546.25; if you are a higher-rate taxpayer the tax is £28,421.25; and for an additional-rate taxpayer the tax is £31,283.25. In practice, company directors taking dividends of this size on top of a salary will often find the dividends span two bands, since even a modest salary can use up the basic-rate band before the dividends are added. This is a key threshold where directors often reassess whether to retain further profit in the company, pay into a pension to bring income back into a lower band, or accept the higher dividend tax rate on withdrawals above this level. There is no National Insurance on dividends, which is why a low salary plus dividends remains a common structure for owner-directors, though the gap has narrowed since dividend rates rose. Use the dividend-tax calculator to see the exact band split for your situation.
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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.