From April 2022, the rates of Dividend Tax and National Insurance will all increase by 1.25 percentage points. Use our own Excel spreadsheet to work out how much more tax you will pay.
April 2022 Dividend Tax Hike
- Read the background to the planned dividend and NIC tax rises here.
- Find out all about dividends – what they are, and how they are taxed here.
- We have made a number of assumptions in our calculations. Please scroll down to read our notes.
- Simply enter your planned salary and dividend levels for the 2022/23 tax year in the input fields below.
2022 Dividend Tax Increase Calculator
Protection for Limited Company Directors
- Protect your contract income if you can’t work – pay via your company!
- Life insurance – save up to 50% – your ltd company pays the premiums
How much will dividend tax increase by?
Each dividend tax rate will be increased by 1.25 percentage points, as follows:
- Basic rate will rise from 7.5% to 8.75% (applied to income over £50,270).
- Higher rate will rise from 32.5% to 33.75% (from £50,271 to £150,000).
- Additional rate will rise from 38.1% to 39.35% (for earnings over £150,000).
The dividend allowance remains unchanged. This means that the first £2,000 of dividends earned are not taxable.
How much will NICs increase by?
Class 1 Employers’ and Employees’ NICs both increase by 1.25%, as do Class 4 Contributions (for the self employed).
You can read the full details of the National Insurance hike here.
- The planned tax rises were announced by Boris Johnson on September 7th 2021, with a planned implementation date of 6th April 2022. These changes have not yet become law, so could feasibly change, or be cancelled altogether.
- The income tax allowances and bands have been frozen for 4 years, as has the Upper Earnings Limit for National Insurance Contributions (£967/week). However the Lower Earnings Limit has not yet been confirmed for the 2022/3 tax year, so we have used the 2021/22 figure of £120/week.
- We have used the 2021/22 Personal Allowance for the 2022/23 tax year – this is currently £12,570.
- If you earn over £100,000 per year, the value of your Personal Allowance is reduced by £1 for every £2 you earn above this threshold.
- Class 1 and Class 4 National Insurance Contributions are both affected by this tax hike.
- As most small limited companies are unable to claim the Employment Allowance, we have not excluded the possible benefits of this tax incentive from our calculations.
- For the sake of simplicity, we have excluded any extra sources of income from the input fields – aside from salary and dividends.
- The tax rates and allowances apply to England and Wales only.
- We created this embedded Excel spreadsheet with our accountants. We rigorously test all of our calculators, however, please always talk with your own accountant before making any financial decisions based on the results provided here.