This tool will calculate your dividend tax liability for the 2022/23 tax year.
- Try our 2021/22 dividend calculator here.
- Please scroll down the page for our notes and assumptions.
- Read our key guide – what are dividends and how much tax do you pay?
- The 1.25% NI rise was reversed from 6th November 2022. Our calculator has been updated to reflect this.
2022-23 Salary & Dividend Tax Calculator
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2022/3 Dividend Tax Rates
|Tax Band||2022/23 Tax Year||Tax Rate|
|Basic||£0 – £37,700||8.75%|
|Higher||£37,701 – £150,000||33.75%|
Changes to Employees’ NI (on Salary) during 22/23 tax year
- At the Spring Statement (23rd March 2022), the Chancellor announced that the Primary Threshold for Class 1 Employees’ National Insurance would rise to £12,570 during the 2022/23 tax year.
- Previously, the PT was due to rise to £9,880.
- However, the increase from £9,880 to £12,570 did not take place until July 6th, 2022.
- Annualised, this means that the Primary Threshold for NI for the 22/23 tax year is £11,908.
- As a result, £11,908 is a tax-efficient salary level for most limited company owners for the 2022/23 tax year.
- Alternatively, a salary level of £9,100 means that you will pay no income tax, employees’ or employers’ NI at all during the tax year, which saves on administration time and costs. After offsetting the Corporation Tax savings vs. NI costs, a salary of £9,100 is only slightly less tax-efficient than paying a salary of £11,908.
- If your company can claim the EA, a £12,570 salary is the most tax-efficient option.
- Find out what is the most tax-efficient director’s salary for 2022/23.
- Make sure you ask your accountant if you would like a personal illustration of salary vs. dividends.
Calculator Notes & Assumptions
- To keep the calculations as simple as possible, you can only enter salary and dividend values. If you have any additional income streams (such as rental income, or other investments), please ask your accountant to create a personalised tax illustration if you have additional income streams.
- The calculator assumes that your company cannot claim the Employment Allowance (most small limited companies cannot).
- * The first £2,000 of dividends are not taxed – as a result of the dividend allowance. This is reflected in the ‘total taxable income’ cell in the calculator above. Confusingly, the dividend allowance sits within your existing income tax bands when it comes to working out your overall tax liability. This is the most frequently asked question we receive about the calculator.
- From April 2022 onwards, all dividend tax rates increased by 1.25 percentage points. You can read the background to the so-called ‘social levy tax rise’ + how much it will cost you here.
- The new dividend tax rates for 2022/23 tax year (factoring in the 1.25 point rise) are: 8.75% (basic), 33.75% (higher) and 39.35% (additional). See the table below.
- The Personal Allowance for 22/23 remains frozen at £12,570 (tax code is 1257L). We have used this code in our calculations
- If you earn £100,000 or more during the year, your personal allowance is reduced by £1 for every £2 you earn above this threshold. At £125,140, your entire allowance will have been removed.
- The calculator uses tax rates for England & Wales. Different rates apply if you live in Scotland.
- All of the calculations have been prepared by our accountants, although we recommend you check with your own tax adviser before relying on any information provided on our site.