Dividend Tax
Tax on dividend income above the dividend allowance, charged at 8.75% (basic), 33.75% (higher), or 39.35% (additional).
Key Points
- ✓Key aspect of the UK income tax system
- ✓Understanding this helps optimize your tax position
- ✓Use Calcedia calculators to see the impact on your finances
- ✓Consult HMRC guidance for official information
Detailed Explanation
Dividend Tax is an important concept in the UK income tax system. Understanding it helps you better manage your finances, optimize your tax position, and make informed decisions about your employment and benefits.
This term relates to how your earnings are taxed.
For a more comprehensive understanding of how this affects your specific situation, consider using our free UK salary calculator to see the real impact on your take-home pay.
Practical Examples
- •Use our take-home pay calculator to see how dividend tax affects your salary directly.
- •The exact impact depends on your personal circumstances including your income level, tax code, and other factors.
Frequently Asked Questions
Related Terms
Personal Allowance
The amount of income you can earn tax-free each year (£12,570 for 2024/25), reduced if you earn over £100,000.
Basic Rate Tax
Income Tax charged at 20% on income between £12,571 and £50,270 (2024/25).
Higher Rate Tax
Income Tax charged at 40% on income between £50,271 and £125,140 (2024/25).
Tax Code
A code used by employers to calculate how much tax to deduct from your pay, usually starting with a number (e.g., 1257L).