This calculator will work out your dividend tax liability for the 2021/22 tax year.
We’ve uploaded an embedded Excel spreadsheet whilst our web app is being updated. Simply refresh the page if you make a mistake.
- Use the 2020/21 dividend calculator here.
- Please scroll down the page for our notes and assumptions.
- Read this handy guide – what are dividends are how are they taxed?
2021-22 Salary & Dividend Tax Calculator
- To keep the calcuations as simple as possible, you can only enter salary and dividend amounts, and no further sources of income. If you do have other income streams, such as rental or investment income, let your accountant know, and they should be able to provide a personalised tax illustration.
- The dividend tax rates for 2021/22 tax year are: 7.5% (basic), 32.5% (higher) and 38.1% (additional). See the table below.
|Tax Band||2021/22 Income||Tax Rate|
|Basic||£0 – £37,700||7.5%|
|Higher||£37,701 – £150,000||32.5%|
- The Personal Allowance for 21/22 is £12,570 (tax code is 1257L). We have used this code in our calculations
- If your income is greater than £100,000, your personal allowance benefit is cut by £1 for every £2 you earn above the threshold. So, at a personal income level of £125,140, your entire personal allowance would have been removed.
- For most limited company owners, the optimal salary for this tax year is £8,840. If your company is able to claim the Employment Allowance, then this rises to £12,570.
- You do not pay any tax on your first £2,000 of dividends, courtesy of the dividend allowance. 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. We often get emails about this!
- Most small company owners cannot claim the employment allowance, so it has been excluded from the calculation. Sole director companies, and those caught by IR35, for example, are ineligible. If your company is eligible, you can reclaim the Employers’ NIC sum listed in the calculation.
- This dividend calculator was kindly created by our accountant for us to share with our users. Although we have taken great care to check all of the calculations, please 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.