Tax on £125,000 in Dividends (2026/27)
By Simon Austerberry, Founder of Quarterday
See the tax on £125,000 in dividends, on top of a £12,570 salary, for 2026/27.
Salary, dividends and tax bands change through the year. Quarterday recalculates your tax and your safe-to-spend number each time they do.
Tax on £125,000 in dividends
These figures use a £12,570 salary, no other income, and the standard tax code (1257L).
| 2026/27 | 2025/26 | |
|---|---|---|
| Salary tax | £2,514.00 | £2,514.00 |
| Dividend tax | £38,798.73 | £36,557.33 |
| Total tax | £41,312.73 | £39,071.33 |
| Take-home pay | £96,257.27 | £98,498.67 |
| Monthly take-home | £8,021.44 | £8,208.22 |
£125,000 in dividends, plus a £12,570 salary, totals £137,570. That is past £125,140, the point where your personal allowance reaches £0.
Your personal allowance falls by £1 for every £2 of income above £100,000. At this income, it has fallen all the way to £0, so your whole £12,570 salary is now taxed at 20%.
That is the £2,514.00 salary tax shown in the table above, and it is the most salary tax this calculator can show: the personal allowance cannot fall below £0.
Some of your dividends also reach the additional rate. £12,430 of them is taxed at 39.35%, the top dividend rate, because your total income is over £125,140.
What changed since 2025/26
The basic rate and the higher rate each rose by 2 percentage points on 6 April 2026, from 8.75% and 33.75%.
On £125,000 in dividends, that rise costs £2,241.40 more in total tax: from £39,071.33 in 2025/26 to £41,312.73 in 2026/27, a 5.7% increase.
Your £2,514.00 salary tax is the same in both years.
See the 2025/26 dividend tax calculator for the rates and figures before this rise.
A heads up on payments on account
The increase in the 2026/27 dividend tax rates could mean higher payments on account, if you pay yourself a similar amount this year as last year.
Payments on account (POA) are two advance payments towards next year's tax bill. Each one is half of your last tax bill.
If you take the same £125,000 in dividends again, here is the extra you would pay, in addition to your tax bill:
| Extra POA to pay | |
|---|---|
| January 2028 | £1,120.70 |
| July 2028 | £1,120.70 |
| Total for the year | £2,241.40 |
How much tax will I pay on £125,000 in dividends?
£41,312.73 in total for the 2026/27 tax year, on a £12,570 salary with no other income: £2,514.00 of salary tax and £38,798.73 of dividend tax.
£39,071.33 in total would have been due under the 2025/26 rates, £2,241.40 less.
Why do I pay salary tax on £125,000 in dividends?
Because your total income is over £125,140, where the personal allowance has fallen to £0.
Below £100,000 total income, a £12,570 salary is fully covered by the personal allowance and pays no income tax. Above £125,140, the allowance is gone entirely, so the whole salary becomes taxable.
When do I pay tax on £125,000 in dividends?
On 31 January 2028, for income taken in the 2026/27 tax year. Because the bill is over £1,000, that date also carries your first payment on account towards 2027/28.
You pay £22,897.76 on 31 January 2028: the £2,241.40 balancing payment for 2026/27, plus a £20,656.36 payment on account. You then pay £20,656.37 on 31 July 2028, the second payment on account.
These figures are based on a previous year's dividend of £125,000, not your actual 2027/28 income. HMRC adjusts them once you file your 2027/28 return.
What this figure assumes
- A £12,570 salary, taken through PAYE, and no other income.
- No personal allowance, and tax code 0T.
- A taxpayer outside Scotland. Dividend tax rates do not differ in Scotland, but salary tax would.
- No pension contributions, salary sacrifice, or other reliefs.
- Payments on account assume your 2027/28 dividends match 2026/27.
The figures on this page are an estimate, from HMRC's published rates, checked each April. Check your position with a qualified accountant before you act on it.
See the full salary and dividend tax calculator to change these figures, or HMRC's Tax on dividends.
Other amounts:
Updated 22 Sep 2026