Calculate UK dividend tax for 2024/25 tax year. Works out tax on dividends from your limited company based on your total income.
UK Dividend Tax Calculator 2024/25
Total Income
Dividend Tax
Income Tax
Net Take-Home
Ad · 336x280
UK Dividend Tax Rates 2024/25
Dividends received from UK companies are subject to UK Income Tax at special dividend rates. Every UK taxpayer has a Dividend Allowance — tax-free dividends up to £500 in 2024/25 (reduced from £1,000 in 2023/24 and £2,000 in 2022/23).
Dividend Tax Rates 2024/25
Within Dividend Allowance: 0% (first £500)
Basic rate taxpayer: 8.75%
Higher rate taxpayer: 33.75%
Additional rate taxpayer: 39.35%
Optimal Salary/Dividend Split for 2024/25
The most tax-efficient combination for a director-shareholder of a limited company is typically a salary equal to the Secondary NI threshold (£9,100) or Personal Allowance (£12,570) with the remainder as dividends. At £12,570 salary with no other income, you can take approximately £37,200 in dividends before hitting the 33.75% higher rate band.
Frequently Asked Questions
The dividend allowance is £500 for the 2024/25 tax year (6 April 2024 – 5 April 2025). This means the first £500 of dividend income is tax-free regardless of your income tax band. It was £1,000 in 2023/24 and £2,000 before that — HMRC has been reducing it each year.
If your total income (salary + dividends) falls within the basic rate band (up to £50,270 for 2024/25), dividends above the £500 allowance are taxed at 8.75%. Since dividends are treated as the 'top slice' of income, your salary fills the lower bands first.
Yes, if your dividend income exceeds £10,000 in a tax year you must register for Self Assessment and complete a tax return. Even below this threshold, if you're a director or have income from multiple sources, Self Assessment is usually required. HMRC may also issue a tax return if they know you receive dividends.
No — dividends received within a Stocks & Shares ISA are completely tax-free. They don't count toward your Dividend Allowance and don't need to be reported on a Self Assessment tax return. The annual ISA allowance for 2024/25 is £20,000.