Tax on £40,000 of dividends and no salary in Wales (2026-27)
With £40,000 of dividends and no salary in Wales, you pay £2,895 of dividend tax in 2026-27. You keep £37,105 in total.
| Salary | £0 |
| Dividends | £40,000 |
| Income Tax on salary (Wales rates) | £0 |
| Employee National Insurance on salary | £0 |
| Dividends covered by unused Personal Allowance | £12,570 |
| Dividends in the £500 dividend allowance (0%) | £500 |
| Dividends taxed at 10.75% | £26,930 |
| Dividend tax | £2,895 |
| Take-home after all tax and NI | £37,105 |
How this is worked out
Dividends sit on top of your other income. Any Personal Allowance (£12,570) your salary does not use covers dividends first, then the first £500 of dividends is taxed at 0%. The rest is taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% above it.
Welsh Income Tax rates for 2026-27 are 20%, 40% and 45%, the same as in England. Dividends are taxed at the same rates across the UK, so only the tax on the salary depends on where you live.
Assumptions: 2026-27 rates, tax code 1257L, no other income, salary paid through PAYE with Class 1 employee NI (dividends carry no NI). Figures are rounded to the nearest pound.
Sources: Tax on dividends (GOV.UK), Income Tax rates and allowances (GOV.UK), Income Tax in Wales (GOV.UK)