Tax on savings interest and dividends calculator

The calculator stacks your income the way HMRC does. Other income (pay, pensions, rent, profits) comes first, then savings interest, then dividends. The personal allowance goes against other income first. Whatever is left goes against interest or dividends, whichever way leaves less tax, as the law allows.

Interest is taxed slice by slice: up to £5,000 at the 0% starting rate for savings, cut £1 for every £1 of other income above the personal allowance; then your personal savings allowance at 0%; then the savings rate for the band each pound falls in. Dividends go on top: the first £500 at 0%, then the dividend rate for the band. Income covered by an allowance still counts towards the bands, so it can push the income above it into a higher one.

Your personal savings allowance depends on your total taxable income, interest and dividends included: £1,000 if all of it is in the basic rate band, £500 if any is in the higher rate band and nothing if any is in the additional rate band.

In the example, £48,000 of pay, £2,000 of interest and £3,000 of dividends make £40,430 of taxable income. That takes income over £50,270, so the savings allowance is £500. Interest pays £300: £500 tax-free and the rest at 20%. Dividends pay £894: the £500 allowance fills the last of the basic rate band, so the rest is taxed at 35.75%.

What this calculator assumes

• Interest is the gross amount paid or credited in the tax year, and dividends the amount received. Interest and dividends inside ISAs and pensions are tax-free and left out.
• Other income is taxable income after any pension contributions taken from pay before tax. Relief-at-source pension contributions and Gift Aid, which widen the basic rate band and lower adjusted net income, aren't included. Neither are the marriage allowance, the blind person's allowance or other reliefs.
• The personal allowance and the basic and higher rate thresholds are frozen until April 2031, so 2027/28 uses the same bands as 2026/27.
• From 2027/28, rental profits in England, Wales and Northern Ireland have their own property rates, 2 points above the main rates. The calculator taxes all other income at the main rates, which changes the tax on that income but not on interest or dividends.
• Scotland's bands for 2027/28 haven't been set yet, so the 2026/27 Scottish bands stand in for tax on other income. Interest and dividends use UK bands either way.

Four allowances can make interest and dividends tax-free, and each one sits in a tax band like taxed income does:

• Personal allowance: the first £12,570 of all income, used by other income first. It falls by £1 for every £2 of adjusted net income over £100,000.
• Starting rate for savings: up to £5,000 of interest at 0%, less any other income above the personal allowance.
• Personal savings allowance: £1,000, £500 or nothing of interest at 0%, depending on your band.
• Dividend allowance: the first £500 of dividends at 0%, whatever your band.

Because the 0% slices still fill the band, £500 of dividends sitting just under £50,270 pushes the next £500 into the higher rate. The allowance saves tax at the rate it covers, not at your top rate.

Adjusted net income is your total taxable income, interest and dividends included, less pension contributions paid with relief at source and Gift Aid, both grossed up. Over £100,000, the personal allowance falls by £1 for every £2, and it's gone at £125,140.

So for someone earning £100,000, £1,000 of interest also costs £500 of personal allowance. With the £500 savings allowance, that's £400 more tax in 2026/27, 40% of the interest.

From 6 April 2027, the 2027/28 tax year, savings interest is taxed at 22%, 42% and 47%, up from 20%, 40% and 45%. The allowances don't change, so only interest above them costs more: 2p more on every taxed pound.

Dividend rates already went up on 6 April 2026 and stay at 10.75%, 35.75% and 39.35%. Rental profits in England, Wales and Northern Ireland get their own rates of 22%, 42% and 47% from the same date.

The order allowances are used in changes too. Until April 2027 the law lets the personal allowance go wherever it saves most tax. From 2027/28 it has to go against pay, pensions and other non-savings income before property, savings or dividend income. The calculator already uses that order for other income.

At the same time, under-65s can put no more than £12,000 a year into cash ISAs, out of the £20,000 allowance. Cash that doesn't fit earns interest that may be taxed. See what no longer fits with the cash ISA limit 2027 planner.