UK Dividend & Salary Tax Calculator
Calculate Your UK Tax
Use our comprehensive calculator to determine your combined dividend and salary tax liability in the UK.
Calculator Options
Understanding UK Dividend & Salary Taxation
What are Dividends?
Dividends are payments made by a company to its shareholders from its profits. If you own shares in a company, you may receive dividend payments. These are taxed differently from regular income in the UK.
How Dividends are Taxed in the UK
In the UK, dividends are taxed at different rates compared to regular income. The tax you pay on dividends depends on your income tax band. Here's how it works:
- Dividend Allowance: Each tax year, you get a tax-free dividend allowance. For the 2023/24 tax year, this is £1,000, reduced from £2,000 in previous years.
- Basic Rate: If you're a basic rate taxpayer, you pay 8.75% on dividends above the allowance.
- Higher Rate: Higher rate taxpayers pay 33.75% on dividends above the allowance.
- Additional Rate: Additional rate taxpayers pay 39.35% on dividends above the allowance.
Combining Salary and Dividends
Many business owners and contractors pay themselves a combination of salary and dividends to optimize their tax position. This is because:
- A small salary can ensure you maintain your National Insurance record for state pension purposes
- Dividends are not subject to National Insurance contributions
- Dividends can be more tax-efficient than salary once you've used your personal allowance
Benefits of Using Our Calculator
Our comprehensive calculator helps you:
- Determine the optimal mix of salary and dividends
- Calculate your total tax liability including Income Tax and National Insurance
- See a breakdown of your taxes across different tax bands
- View a simulated payslip to understand your take-home pay
- Plan for different tax years with updated rates and allowances
Dividend & Salary Calculator Results
| Year | Month | Week | Day | Hour | |
|---|---|---|---|---|---|
| Gross Wage | £50,000 | £4,167 | £962 | £192 | £24 |
| Dividends | £25,000 | £2,083 | £481 | £96 | £12 |
| Salary Tax | £7,486 | £624 | £144 | £29 | £4 |
| Dividends Tax | £8,100 | £675 | £156 | £31 | £4 |
| Total Tax | £15,586 | £1,299 | £300 | £60 | £8 |
| NI | £4,492 | £374 | £86 | £17 | £2 |
| Net Wage | £38,022 | £3,169 | £731 | £146 | £18 |
| Net dividends | £16,900 | £1,408 | £325 | £65 | £8 |
| TOTAL take home | £54,922 | £4,577 | £1,056 | £211 | £26 |
| Employer's cost | £55,709 | £4,642 | £1,071 | £214 | £27 |
| Employer's NI | £5,709 | £476 | £110 | £22 | £3 |
Tax bands for £50,000
Income Tax Bands
National Insurance Bands
Payslip simulator for £50,000 salary
Payments
| Salary | Units | Rate | Amount |
|---|---|---|---|
| 173.33 | £24.05 | £4,167 |
Deductions
| Amount | |
|---|---|
| PAYE Tax | £624 |
| National Insurance | £374 |
This period
Year to date
Step-by-Step Guide to Using the Calculator
1 Enter Your Basic Information
Start by selecting the relevant tax year from the dropdown menu. This ensures that the calculator uses the correct tax rates and allowances for that period. Then, select your country within the UK, as tax rates can vary between England, Scotland, Wales, and Northern Ireland.
2 Add Student Loan Details (If Applicable)
If you're repaying a student loan, select your repayment plan from the dropdown menu. Different plans have different thresholds and repayment rates:
- Plan 1: For students who started before September 1, 2012
- Plan 2: For students who started after September 1, 2012
- Plan 4: For Scottish students
- Plan 5: For students who started after August 1, 2023
3 Include Additional Options (Optional)
Click "Show more options" to reveal additional fields:
- Pension Contributions: Select your pension contribution percentage to see how it affects your tax position.
- Bonus: Enter any annual bonus amount you receive.
- Overtime: Select your typical overtime hours if applicable.
- Tax Code: Enter your tax code if it differs from the standard code (default is 1257L for 2023/24).
4 Enter Your Income Details
Enter your annual dividend income and salary income in the respective fields. These are the core inputs that will determine your tax liability.
5 Calculate and Review Results
Click the "Calculate" button to generate your tax breakdown. The results will show:
- A comprehensive breakdown of your income, taxes, and take-home pay
- Calculations for different time periods (yearly, monthly, weekly, daily, hourly)
- A detailed analysis of which tax bands your income falls into
- A simulated payslip showing how your monthly pay would look
6 Optimize Your Income Structure
Use the calculator to experiment with different combinations of salary and dividends to find the most tax-efficient structure for your circumstances. Try adjusting the values and recalculating to see how your tax liability changes.