1. What is the Dividend And Salary Calculator?

This calculator helps UK taxpayers estimate their net pay when receiving both salary and dividend income for the 2023-24 tax year. It accounts for income tax, national insurance contributions, and dividend tax.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Salary — Gross annual salary in GBP
• Dividend — Annual dividend income in GBP
• Income Tax — Calculated based on UK tax bands
• National Insurance — Calculated based on NI thresholds
• Dividend Tax — Calculated at 8.75% (basic), 33.75% (higher), or 39.35% (additional rate)

Explanation: The calculator considers the personal allowance, tax bands, and dividend allowance to compute taxes accurately.

3. Importance of Tax Calculation

Details: Accurate tax calculation is crucial for financial planning, especially for business owners who take both salary and dividends as income.

4. Using the Calculator

Tips: Enter your gross salary and dividend amounts in GBP. The calculator will compute all taxes and your final net pay for the 2023-24 tax year.

5. Frequently Asked Questions (FAQ)

Q1: What is the dividend allowance for 2023-24?
A: The dividend allowance is £1,000 for the 2023-24 tax year. Dividends above this amount are taxed.

Q2: What are the income tax bands for 2023-24?
A: Basic rate (£12,571-£50,270 at 20%), Higher rate (£50,271-£125,140 at 40%), Additional rate (over £125,140 at 45%).

Q3: How is national insurance calculated?
A: NI is 12% on earnings between £12,576-£50,268 and 2% above £50,268.

Q4: Why combine salary and dividend calculations?
A: Because dividend tax rates depend on your total income including salary.

Q5: Are there other deductions not included?
A: Yes, this doesn't account for student loans, pension contributions, or other deductions that may affect net pay.