Calculator for Take Home Pay and Dividend Tax - DNS Accountants Help to Save Time

Whenever we talk about businesses, there are few aspects that you need to know about. A company consists of both the employer and the employees

Dividend Tax Calculator

Apart from this, there are few shareholders and partners for the company. In this regard, you need to learn about the various taxable positions that each person might have in the company. It is a common knowledge that every employee would have to pay the income tax every year, if they come under the taxable income group. The employees and the directors or the company are also liable to pay taxes based on the turnover they make.

Coming to the point of the shareholders in a company, every person listed as a shareholder is paid a certain amount of money from the profits obtained by the business. The money is paid to them annually, and these shareholders must pay what is called the dividend tax. This is the tax amount that is levied on the person depending upon the dividend they are paid by the company in which they hold the shares. As such, the person is held liable for this type of tax, if the dividend amount paid to him is more than £5,000.

DNS accounting is one such firm, which acts as a one-stop innovative solution for all the difficult financial problems that serve as a constant burden for you.

Sumit Agarwal

Founder & Managing Partner

Calculating the dividend tax

As mentioned earlier, the dividend would be paid to the shareholders through the profit made by the company in the current year. This dividend tax must be filed by the shareholders along with the income tax returns that they file for their earnings. Failure to adhere to the norms might lead to the payment of penalties and they come under serious scrutiny of the HMRC.

Working out the total tax amount for the financial year must include the dividend that you have earned in the current financial year. You can make use of the dividend tax calculator to calculate the tax and add it to your total income tax returns. The calculator will help you in calculating the accurate amount that you need to pay as the dividend tax for your earnings.

The HMRC has certain rules when it comes to calculating the dividend tax. Even when you make use of the dividend tax calculator, you must be well aware about the tax rates that you are liable to use for your earnings. This includes:

  • 7.5% is levied as the base rate for the dividend
  • 32.5% is the higher rate for the tax band
  • 38.1% is levied as the additional tax rate in the tax band

Apart from this, one important thing that you need to understand is that the dividends that come under the personal allowance category cannot be counted toward the £5,000 dividend allowance.

Paying the dividend taxes

Before you make use of the dividend tax calculator, make sure that you fall under either one of the categories of dividend tax bands to help you identify your standing.

  • Dividend less than £5,000

People who earn the dividends below the limit mentioned above do not have to pay the dividend tax.

  • Dividend between £5,000 and £10,000

The HMRC can be contacted to change your tax code for the dividend amount that you earn, and they will add it to your self assessment tax returns, if you have already filled in the form for the same.

  • Dividend more than £10,000

You would be required to fill the self assessment tax returns form with the HMRC. Once you have registered with them, they would get back to you and go on about the other procedures that you need to follow for paying the dividend tax.

Many of the professional accountants can help you with calculating the dividend tax for the dividend that you have got from the company in which you hold the share. They make use of their own dividend tax calculator, which will provide you the accurate amount that you need to pay as tax.

Take home pay: What is it?

When you are hired by a company as an employee, they would provide you with a list of allowances and pay details that you would be entitled to. In this regards, the take home pay is the amount of money that gets credited to your account after deducting certain tax amount from your total salary.

The take home pay would vary as there are various deductions that are to be made before the employer can credit the salary to your bank account. They make use of the take home pay calculator to help them with the calculations of the salary to be paid to the employees after TDS and other forms of deductions. If you observe, the take home pay that gets credited to your bank account is lesser than the total salary mentioned during the orientation. These deductions are as such necessary and this is the common practice everywhere across the globe.

The take home pay calculator is mostly used by the directors and the employers in the payroll system. Payroll deals with the record of salary paid to each and every employee in the company. In this regards, the calculator will prove to be helpful in calculating the total salary to be paid to every employee in a fast rate. As an employee, you have no control over the deductions that are made from your total salary. Needless to say, this is one of the important aspects of every company and cannot be avoided.

DNS Accountants are professional financial experts and accountants who have been helping out the companies with the payroll management. In this regard, DNS Accountants also provide the take home pay calculator service that the companies can make use for calculating the take home pay. The accounting firms can complete the work for you at an affordable rate. This helps in reducing the workload and provides you the time to concentrate on other pressing matters. Many of the companies are now outsourcing this work to accounting firms, as payroll calculation and maintenance is a tedious task that requires keen attention to detail.

Source: DNS Accountants

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Categories: Financial Accounting, Accounting, Business

Tags: Dividend tax calculator, Holiday entitlement, Payroll, self assessment, Take home pay Calculator, Tax Code 1100l, tax return, VAT


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DNS Accountants is an award winning UK based accountancy firm that provides full range of accountancy services, payroll accounting, bookkeeping, self-assessment tax return, year-end accounting service to contractors/freelancer across the UK.

DNS Accountants
Pacific House (382 Kenton Road)
Harrow, Middlesex HA3 8DP
United Kingdom