Use this calculator to work out how much dividend tax you have to pay in 2023/24.
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 some useful notes on how salaries and dividends are taxed, and some assumptions we made.
2023-24 Salary & Dividend Tax Calculator
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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%|
The £1,000 dividend allowance
The first £1,000 of dividends are tax-free, due to the dividend allowance. The value of this allowance has been steadily reduced over the past few years. It was £2,000 during 2022/23.
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?
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’ NI (paid by you)
- £12,570 – £50,270 – 12%
- over £50,270 – 2%
Employers’ NI (paid by your limited company)
- over £9,100 (no upper limit) – 13.8%
What is the optimum director’s salary?
Assuming you can claim the full Personal Allowance, the optimum salary for limited company directors is £12,570.
Read our full guide to working out the optimum directors’ salary in 2023/4.
Assumptions we have made
- To keep the calculators simple, you can only enter salary and dividend values as sources of income. If you earn money from other sources (such as investments), your accountant will be able to create a personal illustration for you.
- We assume that you are entitled to 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, then any employers’ NICs up to £5,000 per year can be reclaimed.
- We have used income tax rates for England & Wales. Different income tax rates are used in Scotland.
Although we have taken great care in creating our calculators with our accountant, please always check your tax calculators with your own accountant before making any decisions.