Use our calculator to work out your dividend tax for the 2020/21 tax year.
- You can use our 2021/22 dividend calculator here [New]
- Please scroll down to read notes and assumptions used.
- Read our background article – what are dividends are how are they taxed?
2020-21 Salary & Dividend Tax 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
Calculator Notes
- To keep the calculations simple, you can’t account for extra sources of income (e.g. Buy-To-Let, or savings). Your accountant will be able to help provide a calculation if you have additional income streams.
- The dividend tax rates for 2020/21 tax year remain as the previous year, i.e. 7.5% (basic), 32.5% (higher) and 38.1% (additional). See the table below.
| Tax Band | 2020/21 (and 2019/20) Income | Tax Rate |
|---|---|---|
| Basic | £0 – £37,500 | 7.5% |
| Higher | £37,501 – £150,000 | 32.5% |
| Additional | £150,000 + | 38.1% |
- The Personal Allowance for 20/21 remains at £12,500 (tax code is 1250L) – this tax code has been used in our calculations.
- If you earn more than £100,000 during the tax year, the personal allowance benefit is cut by £1 for every £2 you earn above the threshold. So, by the time you reach £125,000, your entire personal allowance has been eroded.
- There is no tax payable on the first £2,000 of dividend income, as a result of the dividend allowance. You will see that this is displayed in the ‘total taxable income’ cell. Confusingly, the dividend allowance sits within your existing income tax bands when it comes to working out your overall tax liability.
- Most small limited companies are unable to claim the employment allowance, so it has been excluded from the calculation. If your company is eligible, you can reclaim the Employers’ NIC sum listed in the calculation.
- This calculator was created by our own accountant for us to share with our visitors. Although we have taken great care to check all of the calculations, make sure you talk to your own accountant before you make any financial decisions based on our calculator results.
- Different income tax rates apply in Scotland. Our calculator uses the standard England & Wales income tax rates.