📊Passive Income Calculator

Dividend Yield Calculator

Calculate dividend yields, annual income, and long-term projections with dividend growth and reinvestment.

Stock Details

Total investment: £10,000.00

Automatically buy more shares with dividends

Current Dividend Yield

📊
0.00%
£0.00 annual income • £0.00/month
Annual Income (Year 1)
£0.00
£0.00/month
Projected Income (Year 10)
£0.00
£0/month
Yield on Cost (Year 10)
0.00%
vs initial yield
Total Income (10 years)
£0.00
Cumulative dividends

Dividend Income Projection

Share Growth (DRIP)

Starting Shares:100
Projected Shares (Year 10):0
Share Growth:+NaN%

💡 Dividend Insights

Yield Category
0-2%
Low yield (growth stocks)
2-4%
Moderate yield
4-6%
Good yield
6%+
High yield (check sustainability)
Dividend Safety
A sustainable dividend has:
  • • Payout ratio below 60%
  • • Growing earnings
  • • History of consistent payments
  • • Strong cash flow
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Understanding Dividend Yields

What is Dividend Yield?

Dividend yield is a financial ratio that shows how much a company pays in dividends relative to its stock price. It's calculated as: (Annual Dividend per Share / Share Price) × 100. A 4% yield means you earn £4 per year for every £100 invested.

Dividend Growth Investing

Many investors focus on stocks with growing dividends. A stock with a 3% yield today might yield 6% on your original cost in 10 years if dividends grow 7% annually. This is called "yield on cost" and creates powerful passive income over time.

DRIP (Dividend Reinvestment Plan)

DRIPs automatically use your dividends to buy more shares, creating compound growth. Over 20-30 years, reinvesting dividends can dramatically increase your share count and future income.

UK Dividend Tax

For the 2025/26 tax year:

  • • Dividend Allowance: £500 tax-free
  • • Basic Rate: 8.75% on dividends above allowance
  • • Higher Rate: 33.75%
  • • Additional Rate: 39.35%

Tip: Hold dividend stocks in ISAs or SIPPs to avoid tax on dividends.

Top UK Dividend Sectors

  • • Utilities: Stable, regulated businesses with consistent dividends
  • • REITs: Real estate investment trusts must distribute 90% of income
  • • Banks: Historically strong dividends, but can be cut during downturns
  • • Consumer Goods: Companies like Unilever with steady cash flows