Salary and Dividend Calculator 2017/18
Your income allowances change each April so if you are currently a recipient of dividends and non-dividend income, use our calculator below to estimate your annual tax liability. Enter your full annual salary and full annual dividends in the boxes below to calculate.
What are the 2017/18 tax rules?
From April 2016, the Annual dividend Allowance replaces Dividend Tax Credits; a new personal allowance which means you won’t have to pay tax on the first £5,000 of dividends you receive each year. Dividend rates have also changed, and these are now payable on all dividends received over and above your first £5,000;
- 7.5% on dividend income within the basic rate band
- 32.5% on dividend income within the higher rate band
- 38.1% on dividend income within the additional rate band
As before, there are some exemptions from dividend income which you can read more about here on the Gov website.
How are income taxes and dividend taxes calculated?
Your dividend income does impact your overall Personal Allowance and therefore will mean you will pay a higher incidence of tax if your total income is over £100,000. Your personal allowance of £11,500 (typical, 2017/18) is eroded at 50p for every £1 earned between £100,000 and £123,000 until there is no Personal Allowance available.
If you are not entitled to a Personal Allowance then you will pay tax on the additional £11,500 at a rate of 40% income tax, or the equivalent banded dividend tax for that level of income.
In the 2017/18 tax year, the applicable income tax bands are;
|Band||Taxable income||Tax rate|
|Personal Allowance||Up to £11,500||0%|
|Basic rate||£11,501 to £45,000||20%|
|Higher rate||£45,001 to £150,000||40%|
|Additional rate||over £150,000||45%|