Dividend calculator
What a shareholding actually pays — every payment, every year, and what reinvesting compounds it to — with the income tax on it shown in the order the law stacks your income, because that is what decides the rate.
Calculator
Both come to the same thing — what the holding is worth, and what it pays over a year. Use whichever numbers you have in front of you.
The market value of the holding today.
The annual dividend as a percentage of what the holding is worth. A holding that pays nothing is 0%, and the calculator will say £0 rather than refuse.
Most of the FTSE pays half-yearly — an interim and a final. Investment trusts usually pay quarterly. It changes what each payment is worth, and, if you reinvest, how quickly the money starts working.
How much you assume the dividend itself rises each year. A dividend is declared rather than accrued, so this steps once a year rather than every payment.
Leaving this equal to the dividend growth holds the yield where it starts. Set it higher and the yield falls; set it lower and the yield rises, and reinvested money buys more income.
Set it to 0 to see only what the holding pays now.
Each payment buys more of the same holding at the price then prevailing. The tax is still due either way — see the breakdown.
Salary, pension, self-employed profit — everything except these dividends. It is what decides the rate the dividends meet, so it changes the answer more than any other field here.
Dividends are taxed at UK-wide rates wherever you live. Your other income is not, and in Scotland it is taxed at Scottish rates — which still moves which dividend band your dividends land in.
The growth rates are assumptions, not forecasts. Nothing grows at the same rate every year, dividends are cut as well as raised, and the order the good and bad years arrive in changes the outcome. The schedule below is what these rates would have produced, which is a useful way to compare two plans and a poor way to predict a balance.
Every year is priced at 2026/27 rates. The tax figures are income tax on the dividends only — no National Insurance, because dividends carry none, and no capital gains tax on the holding when you sell it. Pension contributions are not modelled, so a reader relying on relief at source will see too much tax here.
Every calculation runs in this tab. There is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception — it carries your figures in the URL. What that means.
What your dividends pay, and what is left after tax
Dividend income: £2,250.00 a year
That is £562.50 every quarter, 4 times a year, from a holding worth £50,000.00. The yield is 4.50% — the dividend divided by the value, which is a check on the two figures you entered rather than something this page assumes.
After income tax: £1,666.90 a year
Income tax on this year’s dividends is £583.10, which is 25.92% of the dividend. That is not a tax rate, and no such rate exists — it is what the bill came to across whichever bands your dividends straddled, and it moves the moment your other income does. Measured by running the tax calculation twice, with these dividends and without them, on £50,000 of other income in 2026/27.
Where these dividends land, and why the rate is not one number
Income is taxed in a fixed statutory order — other income first, then savings interest, then dividends — so your dividends start wherever the income underneath them finished. Here that is £37,700 of taxable income, and the dividends are stacked on top of it.
| Band | Taxable income slice | Dividends in it | Rate | Tax |
|---|---|---|---|---|
| Covered by your personal allowance | Not taxable | £270.00 | — | £0.00 |
| Dividend allowance | £37,700 – £38,200 | £500.00 | 0.00% | £0.00 |
| Upper rate | £38,200 – £39,680 | £1,480.00 | 35.75% | £529.10 |
| Tax on the dividend bands | £529.10 |
The slice column is taxable income, measured from £0 after allowances — not your salary. The £500 dividend allowance appears here as a nil-rate band rather than as a deduction, because that is what it is: the dividends it covers still occupy room in the stack, so it does not push the rest of them down into a cheaper band.
£270.00 of your dividends is covered by your personal allowance — which is why the column above holds less than the £2,250.00 you are receiving. The law does not simply set the personal allowance against earnings: it may be allocated across income types in whichever way produces the lowest bill (Income Tax Act 2007 s.25(2)), and the calculation searches that allocation rather than assuming one. A pound of allowance is worth whatever rate the pound it shelters would have met, so it goes wherever that is highest — which on a higher-rate income is the dividends rather than the earnings. A calculator that sets the allowance against earnings and stops will report more tax than is due.
This is the dividend half of the stack only. The dividend tax calculator shows the whole of it — your other income and savings interest band by band underneath these, every allowance including the part left unused, employee National Insurance and a take-home figure. If the question you actually have is “what tax will I pay” rather than “what will this pay me”, that is the page.
Your next £100 of dividend income
Another £100 of dividends costs £35.75 in tax. This is measured, not looked up. The tax engine’s own marginal rate probes earned income, so it answers what the next pound of salary would cost; on a page about dividend income that is the wrong question, and the two figures differ whenever the dividend rates and the income tax rates do.
Another £72,890 of income of any kind takes you into the Additional rate band. The calculation measures that gap as £85,460 of taxable income, which is a different figure. Above £100,000 every £2 of income also withdraws £1 of personal allowance, so a pound of income exposes more than a pound of taxable income and the gap closes faster than it looks.
Reinvested, year by year
The rest of this panel is an assumption compounded, not a forecast. It applies your growth rates unchanged to every one of the next 20 years, and nothing does that: dividends are cut as well as raised, prices fall, and the order the good and bad years arrive in changes the outcome. It also charges every year at 2026/27 rates, and the dividend allowance and the dividend rates have both been changed repeatedly over the last decade — nothing here projects any of that forward, and it is the largest assumption on the page. The figures above this line are different in kind: they are this year, at published rates.
| Year | Opening value | Dividends | Income tax | After tax | Closing value |
|---|---|---|---|---|---|
| 1 | £50,000 | £2,287.48 | £596.50 | £1,690.98 | £54,830 |
| 2 | £54,830 | £2,508.43 | £675.49 | £1,832.94 | £60,126 |
| 3 | £60,126 | £2,750.72 | £762.11 | £1,988.61 | £65,933 |
| 4 | £65,933 | £3,016.42 | £857.10 | £2,159.32 | £72,302 |
| 5 | £72,302 | £3,307.76 | £961.25 | £2,346.51 | £79,285 |
| 6 | £79,285 | £3,627.27 | £1,075.47 | £2,551.80 | £86,944 |
| 7 | £86,944 | £3,977.64 | £1,200.73 | £2,776.91 | £95,342 |
| 8 | £95,342 | £4,361.83 | £1,338.08 | £3,023.75 | £104,551 |
| 9 | £104,551 | £4,783.15 | £1,488.70 | £3,294.45 | £114,649 |
| 10 | £114,649 | £5,245.17 | £1,653.87 | £3,591.30 | £125,723 |
| 11 | £125,723 | £5,751.80 | £1,834.99 | £3,916.81 | £137,867 |
| 12 | £137,867 | £6,307.37 | £2,033.61 | £4,273.76 | £151,184 |
| 13 | £151,184 | £6,916.60 | £2,251.41 | £4,665.19 | £165,787 |
| 14 | £165,787 | £7,584.68 | £2,490.25 | £5,094.43 | £181,800 |
| 15 | £181,800 | £8,317.30 | £2,752.16 | £5,565.14 | £199,361 |
| 16 | £199,361 | £9,120.67 | £3,039.36 | £6,081.31 | £218,617 |
| 17 | £218,617 | £10,001.65 | £3,354.31 | £6,647.34 | £239,734 |
| 18 | £239,734 | £10,967.72 | £3,699.68 | £7,268.04 | £262,890 |
| 19 | £262,890 | £12,027.10 | £4,078.41 | £7,948.69 | £288,282 |
| 20 | £288,282 | £13,188.80 | £4,493.72 | £8,695.08 | £316,128 |
| Over 20 years | £126,049.56 | £40,637.20 | £85,412.36 | £316,128 |
Over 20 years the holding pays £126,049.56 of dividends, income tax takes £40,637.20, and the holding itself ends at £316,128 — up £266,128 on the £50,000 you started with. By the final year it is paying £13,188.80 a year, against £2,287.48 in the first.
A reinvested dividend is still taxable income in the year it is paid. That is why the tax column above is not zero. A reinvestment plan is a receipt followed by a purchase, not a transaction that never happened: the dividend is yours, it is taxed, and the shares are bought with it. This schedule reinvests the whole payment and assumes the tax is settled from other money, which is what a DRIP actually does — so if you would have to sell part of the holding to pay the bill, the closing values above are too high. Holding the shares in an ISA is the mechanism that removes the charge, and that page prices it.
The dividend and the share price grow at the same rate here, so the yield stays at 4.50% for the whole term. That is an assumption, and it is the one most reinvestment calculators make without mentioning it — change either growth rate and the yield moves.
Worked example: the same dividend, four different tax bills
Take £50,000 held in shares yielding 4.50% — £2,250.00 a year, paid quarterly, so £562.50 a quarter. Those are the figures the calculator opens with, so every number below can be reproduced by changing one field.
The same dividend, four different bills
Nothing about the holding changes across this table. The only thing that moves is the income sitting underneath the dividends — and it moves the tax from nothing to £688.63.
| Other income | Dividends | Income tax on them | Left after tax | Share taken in tax | Next £100 costs |
|---|---|---|---|---|---|
| None | £2,250.00 | £0.00 | £2,250.00 | 0.00% | £0.00 |
| £20,000 | £2,250.00 | £188.13 | £2,061.87 | 8.36% | £10.75 |
| £50,000 | £2,250.00 | £583.10 | £1,666.90 | 25.92% | £35.75 |
| £150,000 | £2,250.00 | £688.63 | £1,561.37 | 30.61% | £39.35 |
Not one figure in the “share taken in tax” column is a published dividend rate. They cannot be. Each one is an average across whatever the dividend straddled on its way up the stack — part covered by an allowance, part at one rate, part at the next — and the stack is different for every taxpayer. “The dividend tax rate” is not a property of a dividend, which is why this page asks what else you earn instead of asking whether you are a higher-rate taxpayer.
The last column is the one to act on. It is the only figure that answers “what would another £100 of dividend income actually be worth to me”, and on £20,000 it is £10.75 against £39.35 on £150,000.
What the personal allowance does here, which is not what you would expect
On £50,000 of other income, £270.00 of the dividend is covered by the personal allowance rather than taxed at all — even though the salary has apparently used the whole allowance up. The allowance is not fixed to earnings: Income Tax Act 2007 s.25(2) permits it to be allocated across income types in whichever way produces the lowest bill, so a pound of it goes wherever the rate it displaces is highest — here, the dividends rather than the top of the salary. The bill comes to £583.10. A calculator that sets the allowance against earnings and applies the dividend rates to what is left reports more tax than is due, and the reader has no way to tell.
Reinvesting, over 20 years
The same holding, with each quarterly payment buying more of it, against the same holding with the dividends taken as cash. Both assume the dividend and the share price grow at 5.00% a year, which are assumptions rather than forecasts, and both charge income tax on the dividends in every year.
| Figure | Dividends reinvested | Dividends taken as cash |
|---|---|---|
| Dividends over the term | £126,049.56 | £74,398.40 |
| Income tax on them | £40,637.20 | £22,171.94 |
| Dividend income in the final year | £13,188.80 | £5,685.64 |
| Holding at the end | £316,128 | £132,665 |
The tax column does not fall when the dividends are reinvested — it rises. Reinvesting produces £40,637.20 of income tax against £22,171.94, because a reinvestment plan is a receipt followed by a purchase: the dividend is paid to you, it is taxable income in that year, and the shares are bought with it. The bigger holding then pays bigger dividends, which are taxed too. Nothing about reinvesting defers or removes the charge, and a great many people believe it does.
The figures above assume the tax is settled from other money, which is what a dividend reinvestment plan actually does. A reader who has to sell part of the holding to pay it ends up with less than the £316,128 shown. Holding the shares inside a stocks and shares ISA is what removes the charge; the ISA page prices exactly that.
Methodology and sources
This calculator answers what a shareholding pays — per payment, per year, and over a term with the dividends reinvested — and then prices the income tax on it. It does two things that are not equally strong, and they are separated below: the projection is arithmetic on assumptions you supplied and contains nothing published by government, while the tax is built entirely from statutory figures.
The projection half of this page is not a forecast, and carries no verification stamp. There is no rate, threshold or allowance published by government anywhere in it. Nothing grows at the same rate every year; dividends are cut as well as raised; real returns arrive in an order and the order changes the outcome. What the projection claims is narrower and checkable: given the figures you entered and the conventions stated below, the schedule is what those inputs compound to, and the year-by-year table is there so you can check it.
The tax half is different, and the stamp further down is about that half only. The dividend allowance, the dividend rates and the personal allowance and its taper are published figures, checked against gov.uk on the date recorded there. That check covers the rates. It does not cover any answer this page produces — the answer also depends on a growth assumption that nothing could verify, and on today’s rates being applied to every year of a term that has not happened.
Step one: what the holding is, whichever way you describe it
Two inputs, two ways of writing them down, and nothing downstream knows which was used:
from shares: value = shares × share price income = shares × dividend per share
from an amount: value = amount invested income = amount × yieldThe share figures are in pence, because UK equities are quoted in pence. That is not only convention: a dividend per share of 7.7p entered as £0.077 would be rounded to the nearest penny and become £0.08, a 4% error on the one figure the whole page multiplies up.
The yield shown in the breakdown is derived from those two numbers on both bases — it is a check on what you entered rather than an input in its own right.
Step two: the payment schedule, and reinvestment
The holding is treated as one unit at the start. multiple is how many of that unit are held; it begins at 1 and reinvestment is the only thing that moves it. For payment p of n a year, in year y:
unit price = starting value × (1 + price growth)^(p/n)
payment = multiple × starting annual dividend × (1 + dividend growth)^y ÷ n
value = multiple × unit price
if reinvesting: multiple ← multiple + payment ÷ unit priceBoth growth terms are computed from the starting figures rather than by compounding last period’s already-rounded number, so twenty years of rounding cannot drift away from the rate you typed.
Two conventions in there are choices rather than facts. The price moves every period and the dividend steps once a year, because a share price moves continuously and a dividend is declared — a company paying quarterly does not raise its payment by a quarter of the annual growth each quarter, it pays the same amount four times and then a larger amount four times. And the periodic price factor is (1 + g)^(1/n), an effective conversion, so n of them compound to exactly the annual rate you typed; dividing by n instead would quietly turn 5% into about 5.09%.
The consequence, which the table is built to let you check: because a payment is a whole number of pence, closing value = value before the payment + the part reinvested holds exactly on every row, not approximately.
Step three: the tax, one year at a time
No rate is written into this calculator. Each year’s tax is the tax engine run twice and subtracted:
tax(y) = income tax(your other income + dividends in year y)
− income tax(your other income)Running it per year rather than once at a blended rate is what makes the £500 dividend allowance an annual nil-rate band. A single rate applied to a whole term would either use the allowance once or use it every year without saying so, and both are wrong by more than a rounding.
It also means the dividends meet whatever rate the income underneath them leaves them at. Income is taxed in a statutory order — other income, then savings interest, then dividends — so dividends are the top slice and the rate they meet is a property of the taxpayer rather than of the dividend. The dividend tax calculator shows the whole stack band by band; this page shows the dividend bands and stops.
The personal allowance is not simply set against earnings. Income Tax Act 2007 s.25(2) permits it to be allocated across income types in whichever way produces the lowest bill, and the engine searches that allocation rather than assuming one — so part of it routinely lands on the dividends of someone with a higher-rate salary. The breakdown shows that part as its own row, because otherwise the band column would not add up to the dividend above it.
The tax is charged whether or not the dividend was reinvested. A reinvestment plan is a receipt followed by a purchase; the receipt is taxable income in the year it arises. The schedule reinvests the whole payment and assumes the bill is settled from other money, which is what a dividend reinvestment plan actually does — so a reader who would have to sell part of the holding to pay it ends up with less than the closing values shown.
Rates and allowances
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Dividend allowance | £500 | £500 |
| Dividend rates, in stacking order | 8.75% / 33.75% / 39.35% | 10.75% / 35.75% / 39.35% |
| Personal allowance | £12,570 | £12,570 |
| Personal allowance taper starts at | £100,000 | £100,000 |
| Other income, England / Wales / NI | 20.00% / 40.00% / 45.00% | 20.00% / 40.00% / 45.00% |
| Other income, Scotland | 19.00% / 20.00% / 21.00% / 42.00% / 45.00% / 48.00% | 19.00% / 20.00% / 21.00% / 42.00% / 45.00% / 48.00% |
Dividend rates are UK-wide and are not devolved. Scottish rates apply to your other income only — but that other income still decides which dividend band the dividends fall in, which is the part most often got wrong.
Sources
- gov.uk — Tax on dividendsThe dividend allowance, the three dividend rates, and that dividends are treated as the top slice of income.
- gov.uk — Income tax rates and allowances: current and pastThe personal allowance and its taper, and the band thresholds the dividends are stacked against.
- gov.scot — Scottish income tax rates and bandsScottish rates apply to your other income, never to the dividends — but that other income still decides which dividend band the dividends meet.
- gov.uk — Individual Savings Accounts (ISAs)That dividends on shares held inside an ISA are not taxable, which is the one mechanism that removes the charge modelled here.
The rates, thresholds and allowances used by this calculator were verified against gov.uk on . That covers the published rates, thresholds and allowances this page calculates with. It does not verify any figure the page produces for you: that is arithmetic on verified inputs. Parts of the engine behind it are checked against HMRC’s own published worked examples, which tests the method on a small number of scenarios rather than your answer, and most of the test suite derives its expected values by hand. That check was carried out automatically and no named person has signed it off yet.
| Figures covered | Verified on | Verified by | Human sign-off |
|---|---|---|---|
| 2025-26 | 2026-08-12 | Automated verification (Claude Opus 5) | not yet signed off |
| 2026-27 | 2026-08-12 | Automated verification (Claude Opus 5) | not yet signed off |
| 2020-21 to 2024-25 — pension annual allowance only | 2026-08-12 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — share identification window only | 2026-08-13 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — pension relief at source only | 2026-08-13 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — inheritance tax only | 2026-08-13 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — family tax, LISA and pension-access additions | 2026-08-13 | Automated verification (Codex) | not yet signed off |
| 2025-26 and 2026-27 — student loan deductions only | 2026-08-18 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — property acquisition tax only | 2026-08-18 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — automatic enrolment only | 2026-08-18 | Automated verification (Claude Opus 5) | not yet signed off |
| 2025-26 and 2026-27 — State Pension age and rates only | 2026-08-18 | Automated verification (Claude Opus 5) | not yet signed off |
The log covers the rules directory, not only this calculator. 8 rows are deliberately narrow — 2020-21 to 2024-25 — pension annual allowance only; 2025-26 and 2026-27 — share identification window only; 2025-26 and 2026-27 — pension relief at source only; 2025-26 and 2026-27 — inheritance tax only; 2025-26 and 2026-27 — student loan deductions only; 2025-26 and 2026-27 — property acquisition tax only; 2025-26 and 2026-27 — automatic enrolment only; 2025-26 and 2026-27 — State Pension age and rates only — and they verify the figures named there and nothing else. Those tax years are not modelled by any calculator on this site: the years this page can compute are the ones its tax-year selector offers, and no others.
A verification goes stale the moment one of its sources is updated past the date above. If a source below carries a later date than this stamp, trust the source.
Rates, thresholds and allowances on this page are taken from material published by HM Revenue & Customs and the Scottish Government. Contains public sector information licensed under the Open Government Licence v3.0.
Six things this calculator does not do
- It does not forecast a dividend. The growth rates are yours. A company can cut, suspend or cancel a dividend at any time and many have; a high yield is very often the market’s judgement that a cut is coming, and no arithmetic can tell the difference.
- It applies 2026/27 rates to every year of the term. The dividend allowance and the dividend rates have both been changed repeatedly over the last decade and nothing here projects that forward. This is the largest assumption on the page.
- It does not model capital gains tax on the holding when you sell it, and reinvesting builds up exactly the kind of holding that produces one. The capital gains tax on shares calculator is where that belongs.
- It does not model an ISA or a pension wrapper. Dividends inside either are not taxable and none of the tax figures here apply to them. The stocks and shares ISA calculator prices the difference.
- It does not model pension contributions. Relief at source extends the basic-rate band, which is one of the main ways a higher-rate taxpayer reduces a dividend bill.
computeTaxPositiondoes model it; this page has no input for it, so the tax shown is too high for anyone contributing. The pension tax relief calculator works out the band extension. - It applies no withholding tax and no foreign dividend rules. The model is a UK dividend paid to a UK resident. Overseas dividends are commonly taxed at source, and offshore reporting funds, excess reportable income and equalisation payments have their own regime — none of it is here.
Dividend income questions
- How do I work out my dividend income?
Multiply the number of shares you hold by the dividend per share for the year, or multiply what the holding is worth by its yield — they are two ways of writing down the same thing, and the calculator above accepts either. The part people get wrong is the dividend per share: companies declare an interim and a final, and quoting only one of them halves the answer. If you are working from a yield, check what the figure covers, because a trailing yield is what was paid over the last twelve months and a forward yield is what the company is expected to pay over the next twelve, and they are rarely the same number.
- How much tax will I pay on my dividend income?
That depends almost entirely on what else you earn, not on the size of the dividend. Dividends are the top slice of income, so they are taxed after everything else and start wherever the rest of your income finished. On £2,250.00 of dividends, this calculator returns £0.00 of tax for someone with no other income, £188.13 for someone earning £20,000, and £688.63 for someone earning £150,000 — an identical dividend, four times over. That is why the calculator asks what else you earn rather than asking whether you are a higher-rate taxpayer.
For the whole picture — your other income band by band underneath the dividends, every allowance including the part left unused, National Insurance and take-home — use the dividend tax calculator. This page stops at the dividends themselves.
- Are reinvested dividends still taxable?
Yes. A dividend reinvestment plan buys more shares with the dividend, but the dividend was still paid to you first, and it is taxable income in the tax year it was paid whatever you then did with it. Nothing about reinvesting defers or reduces the charge. The practical consequence is that a reinvestment plan can generate a tax bill with no cash to pay it, because every penny went straight back into shares — the calculator above assumes the bill is settled from other money, and if it would not be, the holding you end up with is smaller than the figure shown.
- Do I need to tell HMRC about my dividends?
It depends on the amount and on how you already deal with HMRC, and the thresholds change, so check the current position on gov.uk rather than on any calculator. What is worth knowing in advance is that the trigger is not the tax due but the dividend received: it is entirely possible to owe nothing and still have a reporting obligation. Dividends from shares held inside an ISA are outside all of this — they are not taxable and are not reported.
- Does a dividend calculator need to know about National Insurance?
No, and that is one of the more useful facts about dividend income: dividends carry no National Insurance at any level of income, employee or employer. It is much of why a company director takes part of their income as dividends rather than as salary. The consequence for this page is that the tax figures here are income tax and nothing else — there is no National Insurance to add, and a calculator that adds some to a dividend is wrong.
- What is the difference between dividend yield and dividend growth?
The yield is what the holding pays now as a percentage of what it is worth. Dividend growth is how fast that payment rises. They pull in opposite directions on the same page: a high yield pays more today, and a fast-growing dividend pays more later, and which produces more over a term depends on how long the term is. The calculator keeps dividend growth and share price growth as separate assumptions, because if the price rises faster than the dividend the yield falls even though the payment is going up — the yield is a ratio between two things that move independently.
- Are the growth figures a forecast?
No, and nothing on this site is. The projection applies the rates you entered unchanged to every year of the term, and nothing behaves that way: dividends are cut as well as raised, share prices fall, and the order in which the good and bad years arrive changes the outcome even when the average is identical. Treat it as what those assumptions would have produced, which is a good way to compare two plans and a poor way to predict a balance. The tax rates are a different matter — they are published figures, checked against gov.uk, and the methodology page dates the check.
- Does this calculator recommend any shares or funds?
No. It names no company, no fund, no investment trust and no broker, and it never will. It takes figures you supply about a holding you have chosen and does arithmetic on them. Which shares to hold, whether to hold shares at all, and whether a yield is sustainable are questions this page cannot answer and does not attempt to — a high yield is very often a market judgement that the dividend is about to be cut, and no calculator can tell the difference.