Investing · dividends
Dividend Tax Calculator
See how much of your Canadian dividends you keep after the gross-up and tax credit.
Typically from large Canadian public corporations.
Typically from private CCPCs or small business.
Salary and other income before dividends. It sets your tax bracket.
Gross-up amount
Average tax owed
Net after tax
How Dividends Are Taxed in Canada (2026)
Canadian dividends are taxed in two steps. First the dividend is grossed up, so you report more than you received. Then a dividend tax credit reduces your tax. This makes up for corporate tax the company already paid, which is why Canadian dividends are usually taxed less than interest or salary.
| Type | Typical source | Gross-up | Federal dividend tax credit |
|---|---|---|---|
| Eligible | Public companies (banks, utilities, most TSX stocks) | 38% | 15.0198% of the grossed-up amount |
| Non-eligible | Small private corporations (CCPCs) | 15% | 9.0301% of the grossed-up amount |
Worked Example
You receive a $1,000 eligible dividend. You report $1,380 of taxable income (the 38% gross-up), and the federal dividend tax credit is 15.0198% × $1,380 = $207.27. A $1,000 non-eligible dividend is grossed up to $1,150 with a federal credit of $103.85.
How this calculator estimates: it applies the combined marginal rate you enter to the grossed-up dividend, then subtracts both the federal and your province’s dividend tax credit. For example, Ontario adds a 10% credit on eligible dividends and British Columbia adds 12%. Because the credits can exceed the tax at lower incomes, the result is floored at $0.
Good to Know
- Low incomes can pay little or nothing: with modest other income, the credits can offset most or all of the tax on eligible dividends.
- Foreign dividends get no credit: US and other foreign dividends are taxed like interest, and US dividends usually have 15% withheld.
- Registered accounts: dividends earned inside a TFSA are tax-free, and inside an RRSP they are not taxed until you withdraw.
- OAS clawback: the grossed-up amount counts toward net income, which can matter for seniors near the OAS recovery threshold.
Tax on $10,000 of dividends by province (2026)
Extra income tax on $10,000 of Canadian dividends for someone who also earns a $75,000 salary, and the total tax on $50,000 of eligible dividends with no other income. Eligible dividends from public companies are taxed far less than salary.
| Province | $10K eligible, on top of $75K salary | $10K non-eligible, on top of $75K salary | $50K eligible dividends only |
|---|---|---|---|
| Ontario | $639 | $2,028 | $600 |
| Quebec | $1,639 | $2,893 | $0 |
| British Columbia | $163 | $1,979 | $0 |
| Alberta | $1,016 | $2,218 | $0 |
| Manitoba | $1,412 | $2,695 | $657 |
| Saskatchewan | $963 | $2,467 | $0 |
| Nova Scotia | $1,835 | $3,064 | $1,371 |
| New Brunswick | $756 | $2,613 | $0 |
| Newfoundland and Labrador | $1,888 | $2,619 | $1,927 |
| PEI | $1,598 | $3,079 | $0 |
2026 federal and provincial rates, gross-up and dividend tax credits, from our tax engine.
Own a corporation? Compare paying yourself with the dividend vs salary calculator. See your rate on every kind of income with the marginal tax rate calculator.
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Frequently Asked Questions
What is the dividend gross-up in 2026?
Eligible dividends are grossed up by 38% and non-eligible dividends by 15%. You report the grossed-up amount as income, then claim the dividend tax credit.
What is the federal dividend tax credit rate?
15.0198% of the grossed-up amount for eligible dividends and 9.0301% for non-eligible dividends. Provinces add their own dividend tax credits on top.
What is the difference between eligible and non-eligible dividends?
Eligible dividends come from income taxed at the general corporate rate, such as most public companies. Non-eligible dividends come from income taxed at the small business rate, usually private corporations. Eligible dividends get a larger gross-up and a larger credit.
Are US dividends eligible for the dividend tax credit?
No. Foreign dividends are fully taxable with no gross-up or dividend tax credit. You can usually claim a foreign tax credit for US tax withheld.
Are dividends taxed in a TFSA?
Dividends from Canadian companies earned in a TFSA are tax-free. US dividends in a TFSA still have 15% US tax withheld, which cannot be recovered.
How much tax do I pay on $10,000 of dividends?
It depends on your other income and province. With a $75,000 salary in Ontario, about $639 on eligible dividends and $2,028 on non-eligible dividends.
Can you live on dividends tax-free in Canada?
Close to it in some provinces. With no other income, $50,000 of eligible dividends costs about $600 in income tax in Ontario in 2026, because the dividend tax credit cancels most of the tax.
Rules as of September 2026. Source: Canada Revenue Agency — Dividend tax credit. This tool gives estimates, not tax advice.
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