Home / How much dividends can i pay myself
Arrange a FREE Consultation Call and Let’s Discuss Your Goals!
There’s no set limit on how much you can pay yourself in dividends, as long as your company has enough available profit after Corporation Tax. In 2026/27, dividends above the £500 allowance are taxed at 10.75%, 35.75% or 39.35%, depending on your tax band.
If you own a limited company, you can take money out as salary, dividends or both. Our corporate tax accountants help directors plan a mix that suits the company and their personal tax position.
This guide covers the 2026/27 rates, salary thresholds and the paperwork each dividend needs.
Your company’s available profits set the limit. It can’t pay out more than the profits left after Corporation Tax from the current and previous financial years.
Dividends are taxed as income at the dividend rates below, but they don’t attract National Insurance.
The first £12,570 of your total income is tax-free for most people, and the first £500 of dividends falls within the dividend allowance. The personal allowance shrinks by £1 for every £2 of income over £100,000.
If you’re the only director and shareholder, you decide how much to take. Every payment still has to be backed by profits in the company’s accounts.
Everyone gets a £500 dividend allowance each tax year. Dividends above it are taxed at these rates from 6 April 2026.
| Tax band | Taxable income | Dividend tax rate |
| Basic rate | £12,571 to £50,270 | 10.75% |
| Higher rate | £50,271 to £125,140 | 35.75% |
| Additional rate | Over £125,140 | 39.35% |
The basic and higher rates each rose by 2 percentage points on 6 April 2026. The additional rate stayed at 39.35%.
A dividend is a payment a company makes to its shareholders out of profits. A limited company can only pay one if it has enough profit after Corporation Tax.
Unlike salary, dividends don’t attract National Insurance. You still pay Income Tax on them once they exceed your allowances.
Many directors take a salary of £6,708 to £12,570 and the rest as dividends. The right salary depends on whether your company can claim the Employment Allowance.
These are the 2026/27 National Insurance thresholds that shape the decision.
| Threshold | 2026/27 annual figure | What it means |
| Secondary Threshold | £5,000 | Employer National Insurance at 15% starts here |
| Lower Earnings Limit | £6,708 | Salary above this counts towards your State Pension record |
| Primary Threshold | £12,570 | Employee National Insurance at 8% starts here |
| Personal allowance | £12,570 | Income Tax starts above this |
Use our dividend calculator to estimate the tax on your dividends.
A director takes a £12,570 salary and £37,700 in dividends, a total of £50,270. The salary uses the personal allowance, so the dividends fall in the basic rate band.
The first £500 of dividends is covered by the allowance. The remaining £37,200 is taxed at 10.75%, giving £3,999 of dividend tax.
Dividends come out of taxed profits and can push you into a higher tax band. Check these points before you declare one.
To pay a dividend legally, you need available profits, a minuted directors’ meeting and a voucher for each payment. GOV.UK sets out these steps.
Confirm the company has enough available profit from the current and previous years to cover the dividend.
Directors must hold a meeting to declare the dividend and keep minutes, even if you’re the only director.
Write a voucher for each payment showing these details.
Give a copy of the voucher to each shareholder and keep a copy for the company’s records.
You only need to report dividends to HMRC if they go over your £500 dividend allowance. How you report them depends on the amount.
Paying a dividend without enough available profit is unlawful. A shareholder who knew, or had reasonable grounds to believe, it was unlawful must repay it to the company.
Instead, you can do one of these.
Many directors aim to keep their total income within the basic rate band, which ends at £50,270 in 2026/27. Above that, dividend tax rises from 10.75% to 35.75%.
These factors also shape the right amount.
For advice based on your own figures, speak to our personal tax accountants. They help directors plan their income each year.
How much you can pay yourself in dividends depends on your company’s available profits after Corporation Tax. How much tax you pay depends on your total income and the 2026/27 rates.
A planned mix of salary and dividends, proper paperwork and a check on your tax bands can keep your bill down legally. If you’re unsure, our accountants for company directors can help you plan the years ahead.
Book a free initial consultation to plan your salary and dividends for 2026/27.
Your company needs enough available profit, after Corporation Tax, from the current and previous financial years to cover the dividend.
No. Dividends don’t attract National Insurance, though you pay Income Tax on dividends above your allowances.
Once there are available profits and the directors have declared the dividend at a meeting. Interim dividends can be paid during the year if profits allow.
Many take a modest salary of at least £6,708 for State Pension purposes, and the rest as dividends. The right mix depends on your company’s Employment Allowance position and your other income.
Above the £500 allowance, dividends are taxed at 10.75%, 35.75% or 39.35% in 2026/27, depending on your tax band.
Only if your dividends are over £10,000, or you already file one. Below that, you can ask HMRC to collect the tax through your tax code.
Reviewed by Kamran Inayat, Accounts and Tax Manager at MMBA Accountants. Last updated 23 October 2026.
