Use this calculator to determine how much tax you must pay on dividends received in the 2023/24 tax year.
Access the 2024/25 calculator here.
Click here for the 2022-23 dividend calculator.
Useful dividend articles
- What are dividends, and how are they taxed?
- How to avoid paying an illegal dividend
- How often should you declare dividends?
- What is the dividend allowance?
- What is the most tax-efficient salary/dividend mix in 2023/4?
Please scroll down for the current dividend tax rates, the optimum salary/dividend mix, plus some assumptions we have made.
Salary & Dividend Tax Calculator (2023-24)
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2023/4 Dividend Tax Rates
The additional tax band falls from £150,000 to £125,140 in 2023/24.
| Tax Band | 2023/24 Tax Year | Tax Rate |
|---|---|---|
| Basic | £0 – £37,700 | 8.75% |
| Higher | £37,701 – £125,140 | 33.75% |
| Additional | £125,140 + | 39.35% |
The £1,000 dividend allowance
The first £1,000 of dividends are tax-free, courtesy of the dividend allowance. The value of this allowance has been steadily reduced over the past few years. It was £2,000 during 2022/23. It will be cut again – to £500 from 6th April 2024.
This is why your ‘total taxable income’ in the calculator is £1,000 less than your ‘total income’.
2023/4 PAYE – how is your salary taxed?
Income Tax
The additional rate tax band falls from £150,000 to £125,140 in 2023/24.
- £0 – £12,570 – 0% tax-free Personal Allowance (if eligible)
- £12,571 – £50,270 – 20% basic rate
- £50,271 – £125,140 – 40% higher rate
- over £125,140 – 45% additional rate
If you earn over £100,000, you lose £1 of your Personal Allowance for every £2 over this threshold. In other words, you lose the entire Allowance once you reach £125,140.
Employees’ National Insurance (paid by you)
- £12,570 – £50,270 – 12% (10% from Jan 6th 2024 onwards)
- over £50,270 – 2%
Employers’ National Insurance (paid by your limited company)
- over £9,100 (no upper limit) – 13.8%
What is the optimum director’s salary for 23/24?
Assuming you can claim the total Personal Allowance, the optimum salary for limited company directors is £12,570.
Read our complete guide to working out the optimum directors’ salary in 2023/4.
Assumptions made in the dividend tax calculations
- To keep the calculators simple, you can only enter salary and dividend values as sources of income. Your accountant can create a personal illustration if you earn money from other sources (such as investments).
- We assume that you receive the full personal allowance of £12,570. Therefore your tax code is 1257L. This means that the first £12,570 you earn is free of income tax.
- The calculator assumes that your company cannot claim the Employment Allowance (most small limited companies are usually ineligible). If your company can claim the EA, you can offset employers’ NICs up to £5,000 per year.
- The calculator uses England & Wales income tax rates. Different income tax rates apply in Scotland.
Although we have taken great care in creating our calculators with our accountant, please discuss any tax questions with your accountant and don’t rely solely on any information displayed on this site.