Dividend Calculator
Work out how much dividend income your shares pay now, and what that income could become over time with dividend growth and reinvestment.
Year-by-Year Projection
- Figures are gross, before any tax. See the Dividend Tax Calculator for what you’d actually keep.
- Growth is assumed to be smooth and constant – real companies raise, hold or cut dividends unpredictably. Treat the projection as a scenario, not a forecast.
- Special or one-off dividends, foreign withholding tax, dealing costs and currency effects are ignored.
- This tool is a planning aid only, not financial advice.
Dividend Calculator UK
Our dividend calculator shows how much income your shares pay. Enter your holding, the dividend per share and the current share price to see your annual dividend income and yield, then project how that income could grow over time with dividend increases and reinvestment. All figures are shown before tax – use our Dividend Tax Calculator to work out what you’d actually keep.
How to Use This Dividend Calculator
Three inputs give you the core answer: how many shares you hold, the annual dividend paid per share, and the current share price. From those, the calculator shows your total annual dividend income and your dividend yield. Adding the price you originally paid per share unlocks your yield on cost – often the more meaningful figure for long-term holders.
The projection settings are optional but revealing. Add an expected annual dividend growth rate to model a company that raises its payout each year, switch on reinvestment to compound your share count, or adjust the share price growth assumption to see how the value of the holding develops alongside the income it produces.
How Dividend Income Works
A dividend is a share of a company’s profits paid out to shareholders, usually in cash, typically once, twice or four times a year. Your annual dividend income is simply the number of shares you hold multiplied by the dividend paid per share: 1,000 shares paying 10p each gives you £100 a year, regardless of what you paid for the shares or what they’re worth today.
UK companies typically announce dividends as a pence-per-share amount – say 10p – and pay them in instalments throughout the year. Most UK-listed companies pay twice a year (an interim and a final dividend), while many investment trusts and some large companies pay quarterly. Whichever schedule applies, the arithmetic of your annual income is the same: shares × annual dividend per share.
Dividend Yield vs Yield on Cost
The dividend yield is the annual dividend divided by the current share price – what someone buying the shares today would earn. Yield on cost is the annual dividend divided by what you originally paid. If you bought shares at £2.00 that now trade at £4.00 and pay a 12p dividend, the yield is 3% but your yield on cost is 6% – you’re earning double on your original investment.
Yield on cost is useful for tracking how well an income investment has served you, but be careful not to confuse it with the yield a buyer would get today. A 6% yield on cost doesn’t mean the shares are a 6% yield opportunity now – new buyers get whatever the dividend is worth at today’s price.
The Effect of Dividend Growth and Reinvestment
Many companies aim to raise their dividend each year. Combined with reinvesting dividends to buy more shares, this creates a compounding snowball: each year’s income buys more shares, which produce more income, which buys more shares again. The calculator above lets you model both effects.
Take the default example: 1,000 shares at £2.00 paying 10p each – £100 of annual income. With dividends reinvested and the dividend held flat, the share count compounds: after five years you’d hold about 1,276 shares and the final-year income would be roughly £121.55 – over 21% more income than the holding paid out when you started, without adding a penny of new money. Stretch that to twenty years and the same share count grows past 2,650.
For comparison, the same £2,000 invested without reinvesting still pays £100 every year – the income never grows, and the compounding effect is lost entirely.
Where to Find Dividend Information
- Company investor relations pages – look for “dividends” or “shareholder information”; the annual dividend per share is usually stated alongside the announcement of each payment.
- Your broker’s portfolio view – most show projected annual income and yield for each holding and for your portfolio as a whole.
- Fund factsheets – for funds and investment trusts, you’ll typically see a “distribution yield” or “underlying yield” figure rather than a dividend per share; you can still use this calculator by entering the fund’s price and annual distribution per unit.
What Dividend Calculators Don’t Tell You
- Dividends are never guaranteed. Companies can and do cut or suspend them, especially in recessions.
- A very high yield can be a warning sign that the market expects a cut, not a bargain.
- Dividend income is taxable above your allowance – see our Dividend Tax Calculator.
- Holding dividend payers inside a Stocks & Shares ISA shelters the income from tax entirely – see our ISA Calculator.
- The projection assumes smooth, constant growth – real dividend histories are lumpier.
Frequently Asked Questions
How do I calculate my dividend income?
Multiply the number of shares you hold by the annual dividend per share. For example, 500 shares paying 25p a year pay 500 x £0.25 = £125 a year. If the company pays quarterly, that’s £31.25 every three months. The calculator above does this instantly and projects it forward.
How is dividend yield calculated?
Divide the annual dividend per share by the current share price. A share costing £4.00 paying a 12p annual dividend yields 12 ÷ 400 = 3%. Yields move constantly with the share price, even when the dividend itself is unchanged.
What is yield on cost?
Yield on cost is the annual dividend divided by the price you originally paid per share, rather than today’s price. It measures how much income your original investment now generates. Give the calculator your purchase price to see it alongside the current yield.
Do I pay tax on dividend income?
Possibly – it depends on your total income and your dividend allowance. Working that out involves tax bands and other income, which is a different calculation from this one. Use our Dividend Tax Calculator for a full breakdown, and remember that dividends held inside a Stocks & Shares ISA are tax-free.
Is a higher dividend yield always better?
No. A high yield can mean the share price has fallen because the market expects a dividend cut. Sustainable dividends are supported by the company’s earnings and cash flow. A moderate yield that grows every year often beats a high yield that stalls.
Does reinvesting dividends really make much difference?
Over long periods, reinvestment is one of the biggest drivers of total return. In the example above – 1,000 shares at £2.00 paying 10p with dividends reinvested – the year-five income rises to about £121.55 versus £100 if the cash were taken, and the holding grows to roughly £2,552.56 without any share price growth. The longer the period, the larger the effect.
Should I invest for dividends inside an ISA?
Usually yes if you have allowance available. Dividends inside a Stocks & Shares ISA are free of dividend tax entirely, and the allowance outside an ISA is modest – which is why income investors often prioritise filling their ISA with dividend payers first. See our ISA Calculator to model the long-term effect.
Can I use this calculator for funds and ETFs?
Yes, with a small adjustment. Funds distribute an amount per unit rather than declaring a dividend per share – enter the number of units you hold and the annual distribution per unit (from the fund’s factsheet) in place of shares and dividend. The projection maths works identically.