Work out how much tax to pay on dividends during the 2024/5 tax year
More calculators and useful guides
Please scroll down for tax tables and assumptions we’ve made.
Salary & Dividend Tax Calculator (2024-25)
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2024/5 Dividend Tax Rates
The rates are the same as 2023/24.
| Tax Band | 2023/24 and 2024/5 Tax Years | Tax Rate |
|---|---|---|
| Basic | £0 – £37,700 | 8.75% |
| Higher | £37,701 – £125,140 | 33.75% |
| Additional | £125,140 + | 39.35% |
The £500 dividend allowance
The first £500 of dividends are tax-free, thanks to the dividend allowance.
Confusingly, the allowance still takes up £500 of your income tax basic rate band.
The allowance has been reduced steadily over time. In 2023/4 it was £1,000.
How is your salary taxed in 2024/5?
Income Tax
- £0 – £12,570 – 0% tax-free Personal Allowance
- £12,571 – £50,270 – 20% basic rate
- £50,271 – £125,140 – 40% higher rate
- over £125,140 – 45% additional rate
The £12,570 Personal Allowance is eroded by £1 for every £2 you earn over the £100,000 threshold.
Employees’ National Insurance (paid by you)
- £12,570 – £50,270 – 8%
- over £50,270 – 2%
Employers’ National Insurance (paid by your company)
- over £9,100 – 13.8%
What is the most tax-efficient director’s salary for 24/25?
The optimum salary for limited company directors is £12,570 – the same as in 2023/4. This assumes you are eligible for the full Personal Allowance.
This is the most tax-efficient salary for directors, irrespective of whether you can claim the Employment Allowance or not.
Find out more – the optimum salary level for directors in 2024-5.
Dividend tax calculator – assumptions
We have made some assumptions to keep our calculator as simple as possible.
- The tax rates and bands used apply to England & Wales (not Scotland).
- You can only include dividends and salary. If you have other sources of income, from investments or rentals, please ask your accountant to create a personal calculation.
- The calculator assumes that your tax code is 1257L and you are eligible for the entire £12,570 Personal Allowance.
- Most small limited companies are not eligible to claim employers’ NICs back via the Employment Allowance so we have not included it. If your company can claim the EA, you can offset employers’ NICs up to £5,000 per year.
Our accountants have prepared and validated our calculations. However, please don’t rely solely on the information contained on this page. Talk to your accountant if you have any questions about salaries and dividends.
