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Contractor Salary and Dividend Tax Calculator – 2024/25

Use this calculator to calculate the tax you must pay on different combinations of salary and dividends during the 2024/5 tax year.

How are dividends taxed?

Any dividends you receive are treated as your top slice of income. In other words, your salary and any other sources of income are taxed first.

The current rates of dividend tax are:

  • Basic rate – 8.75% (tax band from £12,570 – £50,270)
  • Higher rate – 33.75% (from £50,271 to £125,140)
  • Additional rate – 39.35% (above £125,1400)

The personal allowance means that your first £12,570 of income is tax-free.

For the 2024-5 tax year, there is also a £500 dividend tax-free allowance.

Salary and Dividend Tax Calculator – 2024/25

Please enter your salary and dividends to calculate your tax liability for the 2024/5 tax year.

Scroll down for some assumptions we have made.

Further Information / Assumptions

  • This calculator works out the tax payable on any salary and dividends you receive during the current tax year.
  • £12,570 is the most tax efficient salary for this tax year – you can find out more here.
  • You will typically receive the full personal allowance for the year in question unless you receive £100,000 or more. After this threshold, your allowance is reduced by £1 for every £2 you receive over this limit.
  • We assume that you were employed throughout the year, and this is your only source of income.
  • No benefits in kind or other non-employment income have been received during the year.
  • The dividend allowance is £500. The first £500 of dividends are tax-free, although the allowance still uses up £500 of the basic rate tax band.
  • The Employment Allowance has been ignored as single-director companies are ineligible. The Employers’ NI amount will be refunded if your company is eligible.
  • The income tax rates and bands used apply to the whole of the UK, except Scotland, which has separate rates.

Although our accountants have validated this calculator, please discuss your tax affairs with your own accountant before making a dividend declaration.

Partner Contractor Accountants

Last updated: 15th April 2024