Your Tax Calculator

Tax Year 2024 / 25

Your Income

Employment / PAYE income

Self-employment profit (sole trader only)

Rental income

Other taxable income

Dividend income

Adjustments & Options

Personal pension contributions

Gift Aid donations

Tax jurisdiction

Marriage Allowance (transferee) You receive £1,260 from your partner

Note: Scottish rates apply to income only Dividend tax rates are UK-wide (not Scottish)

Results Summary

Total Income

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Tax-Free

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Income Tax

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NIC

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Take-Home

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Tax Summary

Total gross income	—
Personal Allowance & reliefs	—
Total taxable income	—
Tax on salary & other income	—
Dividend tax	—
Employee NIC	—
Total tax + NIC	—
Total take-home pay	—

Income Breakdown

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eff. tax rate

Dividend Tax Bands

Band	Rate	Div. in band	Tax due

Income Tax

Band	Rate	Amount	Tax due

National Insurance

Class / Band	Rate	Earnings	NIC due

Understanding UK Dividend Tax: A Complete Guide for 2024/25

What is dividend tax and who pays it?

Dividend tax is charged on income you receive from shares in a company — whether your own limited company, UK-listed shares, or overseas equities held outside an ISA. The first £500 of dividend income is covered by the Dividend Allowance at 0%. Anything above is taxed at rates depending on your income tax band.

Dividends inside a Stocks and Shares ISA or SIPP are completely free of dividend tax and should not be entered in this calculator.

Dividend tax rates 2024/25

Dividend tax rates are set by the UK government and apply across all nations — they are not devolved to Scotland.

Band	Income range	Rate
Nil rate	First £500	0%
Basic rate	Up to £50,270	8.75%
Higher rate	£50,271–£125,140	33.75%
Additional rate	Above £125,140	39.38%

Director salary & dividends: the optimal split

Most owner-directors pay themselves a low salary — typically £12,570 (the Personal Allowance) — and top up with dividends. This minimises NIC while using the tax-free allowance efficiently.

Dividend tax rates (8.75% / 33.75%) are substantially lower than equivalent salary tax (20% / 40%), making dividends a tax-efficient way to extract profit after the company has paid Corporation Tax.

The £100,000 Personal Allowance trap

If your adjusted net income exceeds £100,000, your Personal Allowance tapers by £1 for every £2 over that threshold. At £125,140 it is entirely withdrawn, creating an effective 60% marginal tax rate in that band.

This calculator automatically applies the taper and alerts you when affected. Pension contributions and Gift Aid donations can reduce your adjusted net income back below £100,000.

How National Insurance applies

Dividends do not attract NIC — one of their key advantages over salary. NIC applies to earned income only:

Class 1 (employee) — 8% on salary £12,570–£50,270, then 2% above
Class 4 (self-employed) — 6% on profits £12,570–£50,270, then 2% above
Rental income and dividends carry no NIC liability

Pension contributions & Gift Aid

Both personal pension contributions and Gift Aid donations extend your basic rate band by the gross amount. This pushes more dividend income into the 8.75% band rather than 33.75%, potentially saving significant tax for higher earners.

Always enter the gross figure — including basic rate relief claimed by the pension provider on your behalf.

Frequently Asked Questions

How much dividend can I take tax-free in 2024/25? +

The Dividend Allowance for 2024/25 is £500. The first £500 of dividend income is taxed at 0% regardless of your band. This has fallen sharply from £2,000 in 2022/23 and £1,000 in 2023/24. You must still declare dividend income on your Self Assessment return even if it falls within the allowance.

Do I pay dividend tax on shares held in an ISA? +

No. Dividends from shares held in a Stocks and Shares ISA are completely free of tax and do not count towards your Dividend Allowance. The same applies to a SIPP. Only enter dividends received outside these wrappers in this calculator.

I'm a limited company director — do I use the self-employment field? +

No. The self-employment profit field is for sole traders only. As a director, enter your salary in the Employment / PAYE field and dividends in the Dividend income field. Do not enter company turnover or profit in the self-employment field — this would double-count income you are also entering as dividends.

What's the most tax-efficient director salary for 2024/25? +

Most owner-directors pay themselves £12,570 (equal to the Personal Allowance), meaning no income tax on the salary while it remains deductible for the company. Some choose £9,100 (the Secondary Threshold) to avoid employer NIC entirely. The best level depends on your individual circumstances — use this calculator to model different figures and see the impact.

How do I report dividend income on my Self Assessment return? +

You must complete a Self Assessment return if your total dividend income exceeds £500, or if you are already required to file for other reasons. Enter gross dividend income in the "Income from UK dividends" section. The deadline for online returns is 31 January following the end of the tax year.

Does rental income attract National Insurance? +

No. Rental income is classified as investment income and carries no NIC liability. It is subject to income tax in the same way as other income — filling your tax bands alongside salary and self-employment income, with dividends sitting on top. This calculator correctly applies income tax to rental income while excluding it from NIC calculations.

What is the 60% tax trap and how do I avoid it? +

When adjusted net income exceeds £100,000, the Personal Allowance (£12,570) is withdrawn at £1 for every £2 over the threshold, creating an effective 60% marginal tax rate between £100,000 and £125,140. The most common strategy is making personal pension contributions or Gift Aid donations to bring adjusted net income back below £100,000. This calculator alerts you when you enter the taper zone.

⚠ Important Legal Disclaimer & Limitations

For illustrative purposes only. This calculator is provided as a free educational and planning tool. Results are estimates based on 2024/25 HMRC rates and thresholds as understood at the time of publication. Figures must be treated as a guide only and must not be relied upon as a final, accurate or complete calculation of your tax liability.

Not financial or tax advice. Nothing on this page constitutes financial advice, tax advice, legal advice, or any other form of professional advice. The calculator does not account for your full personal circumstances, all possible reliefs and deductions, HMRC-specific rules applicable to your situation, or legislative changes occurring after the date of publication. Do not make financial decisions based solely on the output of this tool.

Seek professional advice. You are strongly encouraged to consult a qualified accountant, tax adviser, or chartered financial planner before making tax planning decisions. To find a qualified adviser, visit ICAEW, ICAS, or HMRC.

Accuracy & errors. Whilst every effort has been made to ensure calculations are correct, no warranty or representation is made as to accuracy, completeness, or fitness for purpose. The publisher accepts no liability for any loss, damage, penalty, or interest arising from any error in the calculation, any reliance on the results, or any decisions made on the basis of output. Always verify current rates at gov.uk/income-tax-rates.

Limitations. This tool does not cover: Capital Gains Tax, Inheritance Tax, Corporation Tax, VAT, employer NIC, Class 2 NIC, the High Income Child Benefit Charge, the Remittance Basis, foreign income complexities, trust income, share schemes (EMI, SAYE, CSOP), income from prior tax years, or the mortgage interest restriction for residential landlords.

Your responsibility. You are personally responsible for the accuracy of your Self Assessment return. Errors or omissions can result in penalties and interest from HMRC. The deadline for online returns is 31 January following the end of the tax year.

UK DividendTax Calculator