Limited company dividend tax calculator (2026/27)

If you are a limited company director, you will typically pay yourself a salary and withdraw some or all of your remaining company profits as dividends.

Use this calculator to estimate the tax payable on any combination of salary and dividends in the 2026/27 tax year.

Scroll down for further guidance on choosing a tax-efficient salary, together with some important assumptions about the calculations.

Limited company dividend calculator

Important notes

• A £500 Dividend Allowance applies for 2026/27. This is automatically included in the calculator.
• The calculator uses the Income Tax rates and bands applying to taxpayers in England, Wales and Northern Ireland. Scottish Income Tax rates and bands for salary income are different and are not covered.
• The calculator assumes that your only taxable income is the salary and dividends entered. Other income may affect your Personal Allowance and the tax rates applying to your dividends.
• For simplicity, the calculator does not apply the Employment Allowance. A company with only one director cannot normally claim the allowance if that director is the only employee liable for employer’s National Insurance. Other companies may qualify.
• You can compare the results with HMRC’s dividend and savings tax guidance.

How are salary and dividends taxed?

Salary is subject to Income Tax and, where the relevant thresholds are exceeded, employee and employer National Insurance.

The standard Personal Allowance for 2026/27 is £12,570. If you are entitled to the full allowance, no Income Tax is normally due on salary covered by it.

However, the Personal Allowance begins to be withdrawn once adjusted net income exceeds £100,000, at a rate of £1 for every £2 of excess income. It is completely withdrawn at £125,140.

Class 1 employer National Insurance is charged at 15% on salary above the £5,000 Secondary Threshold.

Class 1 employee National Insurance is charged at 8% on earnings above £12,570 up to £50,270, and 2% on earnings above £50,270.

Dividends are not subject to National Insurance, but they are subject to dividend tax.

For 2026/27, dividend income above the £500 Dividend Allowance is taxed at 10.75% within the basic-rate band, 35.75% within the higher-rate band and 39.35% within the additional-rate band.

The calculator automatically applies these rates according to the salary and dividend figures you enter.

Dividends – further considerations

You can only pay dividends where your company has sufficient distributable profits available.

Dividends paid without sufficient available profits may be unlawful and can create accounting and tax complications, particularly where the shareholder knew or should have known that sufficient profits were not available.

For this reason, you should not decide how much to withdraw simply by looking at the company’s bank balance.

If your bookkeeping and company accounts are kept up to date, your accounting software should normally give you a good indication of the profits available for distribution. However, you should also allow for liabilities such as Corporation Tax and other amounts the company still has to pay.

If you are unsure how much can safely be paid as dividends, ask your accountant.