Canada Dividend Tax Calculator
This dividend tax calculator for Canada estimates tax on eligible and non-eligible dividends using the gross-up and the federal and provincial credits.
What it does
The Canada Dividend Tax Calculator estimates tax on eligible and non-eligible Canadian dividends using the gross-up and the federal dividend tax credit.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| Federal personal income tax brackets and rates for 2026. | Rate schedule | canada.ca | Effective 2026-01-01Verified unchanged at CRA; citation repointed to the CRA page that prints the figures (the stored link was truncated and dead). |
| Maximum federal basic personal amount for 2026. | 16,452 | canada.ca | Effective 2026-01-01Verified 16452 at CRA indexation page; citation repointed (the stored link was truncated and dead). |
| Provincial and territorial personal income tax brackets and rates for 2026. | Rate schedule | canada.ca, revenuquebec.ca | Effective 2026-01-01BC lowest rate corrected 5.06 to 5.6 pct; PE fourth band to 142520 with a new 20 pct band over 200000. MB kept at 47000/100000: its indexation is paused, and CRA payroll tables confirm it. |
| Provincial and territorial basic personal amounts for 2026, claimed at each jurisdiction lowest rate. | Rate schedule | canada.ca, revenuquebec.ca | Effective 2026-01-01NL raised from 11188 to 13094, retroactive to 1 January 2026 (CRA T4127 July 2026, 123rd edition; payroll applies a prorated 15000 from July). Other 12 amounts unchanged. audit 2026-09-23 |
| Lowest provincial or territorial tax rate for 2026, used to value the provincial basic personal amount credit. | Rate schedule | canada.ca, revenuquebec.ca | Effective 2026-01-01BC corrected from 5.06 to 5.6 pct for 2026. Every other jurisdiction verified unchanged against its 2026 first bracket. |
| Ontario surtax for 2026: 20 pct of basic Ontario tax over 5818 plus 36 pct over 7446. Prince Edward Island has no surtax. | Rate schedule | canada.ca | Effective 2026-01-01Label names the year in the auditor format. Thresholds 5818 and 7446 unchanged (CRA T4032ON effective 2026-01-01). audit 2026-09-23 |
| Dividend gross-up factors, Income Tax Act s.82(1)(b): 38 pct eligible, 15 pct non-eligible. | Rate schedule | laws-lois.justice.gc.ca | Effective 2025-01-01Verified in the statute; citation moved off a tax-tips site. Left open-ended because the factors are fixed in the Act, not indexed. |
| Federal dividend tax credit as a fraction of the taxable dividend: s.121 gives 6/11 and 9/13 of the gross-up, i.e. 38/253 and 27/299. | Rate schedule | laws-lois.justice.gc.ca | Effective 2025-01-01Verified in the statute: (6/11)x(38/138)=38/253=0.150198 and (9/13)x(15/115)=27/299=0.090301. Citation moved off a tax-tips site. Left open-ended because the fractions are fixed in the Act. |
| Provincial/territorial dividend tax credit for 2025-2026, as a fraction of the grossed-up taxable dividend. Each jurisdiction sets its own rate under its own Income Tax Act, separate from and in addition to the federal credit of s.121 ITA. | Rate schedule | canada.ca, legisquebec.gouv.qc.ca | Effective 2025-01-01All 13 jurisdictions checked line by line on the CRA Worksheet 428 e-texts (Quebec on Taxation Act s.767 and s.497); every rate matched. Citation moved off a tax-tips site. |
| Quebec abatement of basic federal tax | 0.165 | canada.ca | Effective 2026-01-01Quebec refundable federal tax abatement (reduces federal tax for Quebec residents) |
| Minimum federal basic personal amount for 2026, reached at net income of 258,482 and above. Between 181,440 and 258,482 the amount falls in a straight line from the maximum. The Yukon amount follows the same formula. | 14,829 | canada.ca | Effective 2026-01-01 |
| Manitoba basic personal amount phase-out for 2026: full amount at net income up to 200,000, falling in a straight line to zero at 400,000. | Rate schedule | canada.ca | Effective 2026-01-01 |
| Ontario tax reduction for 2026 (no dependants): tax and surtax are reduced by the lesser of that amount and twice the basic reduction amount minus it. | Rate schedule | canada.ca | Effective 2026-01-01 |
| British Columbia tax reduction for 2026 (BC announcement of 17 February 2026): up to 690 at taxable income to 25,570, then falling at 3.56 percent of the excess until it reaches zero at 44,952. | Rate schedule | canada.ca | Effective 2026-01-01Corrected from the January 2026 payroll table (575, ending 41,722) to the July 2026 edition's annual (Option 2) formula: maximum 690, 3.56 percent, zero above 44,952. |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Tax = marginal tax(grossed-up dividend) - federal dividend tax credit
How it works
It grosses up the cash dividend, taxes the grossed-up amount at your combined marginal rate, then subtracts the federal dividend tax credit.
Where it is used
- Estimating tax on Canadian dividends
- Comparing eligible vs non-eligible treatment
- Planning investment income by province
Worked example
A CA$10,000.00 eligible dividend grosses up to …; after the credit the estimated tax is ….
What the dividend tax calculator does
The calculator estimates the tax on Canadian dividends using the CRA’s gross-up and credit system. It grosses up the cash dividend to approximate the underlying corporate profit, taxes that amount at your combined federal and provincial marginal rate, and subtracts the federal and provincial dividend tax credits.
The system is designed so that the same profit is not taxed in full twice, first in the company and again in your hands, so the effective rate on dividends is often lower than on salary or interest.
Eligible versus non-eligible dividends
Eligible dividends are paid from corporate income taxed at the general rate, usually by larger public companies. They are grossed up by 38% and carry a larger credit. Non-eligible dividends come mainly from income taxed at the small business rate; they are grossed up by 15% and carry a smaller credit. Choose the right type, because it changes both the amount taxed and the credit.
How the calculation works
- It multiplies the cash dividend by one plus the gross-up rate for its type.
- It adds the grossed-up amount on top of your other income.
- It measures the extra combined federal and provincial tax that the addition creates.
- It subtracts the federal and provincial dividend tax credits on the grossed-up amount.
Because your other income sets your starting bracket, the same dividend can be taxed at different rates for different people.
A worked example
You receive $10,000 of eligible dividends and already earn $80,000 in Ontario. The 38% gross-up makes the taxable dividend $13,800. At a combined marginal rate of 29.65%, tax before credits is about $4,092. The federal dividend tax credit (about 15% of the grossed-up amount) removes about $2,073, and Ontario’s credit (10%) removes $1,380, leaving about $639 of tax. You keep about $9,361, an effective rate of about 6.4% on the cash received.
The same $10,000 as non-eligible dividends is grossed up to $11,500. Tax before credits is about $3,410; the federal and Ontario credits remove about $1,038 and $343, leaving about $2,028, an effective rate of about 20.3%.
Compare salary: this person’s next $10,000 of employment income would be taxed at 29.65%, about $2,965. The gap is the practical effect of the gross-up and credit system.
What you need to enter
- The cash dividend you received.
- Whether it is eligible or non-eligible.
- Your other taxable income for the year.
- Your province or territory of residence.
Your T5 slip or brokerage statement shows whether each dividend is eligible.
Reading your result
The output shows the grossed-up dividend, the tax before credits, the federal and provincial dividend tax credits, the estimated tax and the after-tax dividend. The grossed-up figure explains why the taxable amount is larger than the cash you received; the credits explain why the final tax is far below the tax before credits.
Why dividends can be tax-efficient
The company has already paid corporate tax on its profit, and the dividend tax credits return an approximation of that tax to you. For eligible dividends the credits are generous enough that many middle-income investors face a low effective rate, in some brackets lower than on capital gains. That is why dividends feature heavily in the income of retirees and conservative investors, and why business owners weigh salary against dividends when paying themselves.
Factors that change the result
Your other income matters most, because the grossed-up dividend sits on top of it and is taxed at the resulting marginal rate; a large dividend can push part of itself into a higher bracket. Provincial dividend tax credits and brackets vary widely, so the same dividend can be noticeably cheaper in one province than another. The eligible or non-eligible classification changes both the gross-up and the credit. At low incomes the credits can exceed the tax on the dividend, but they are non-refundable, so the tax on the dividend stops at zero.
Quebec
Quebec residents calculate provincial tax on a separate return with Revenu Québec, which has its own dividend rules. The federal side of the calculation is the same.
Records, forms and common mistakes
Dividends are reported on a T5 slip, or a T5013 for a partnership, which shows whether each amount is eligible or non-eligible. On your return they go on Schedule 4, with the grossed-up amounts flowing to the main return. The most common mistake is treating all dividends as eligible, which overstates both the gross-up and the credit. When the amount is large, or you are comparing salary with dividends from your own corporation, confirm the figures with the CRA or an accountant.
When to use this tool
Use it to compare dividend income with salary or interest, to see the difference between eligible and non-eligible sources, or to plan investment income across provinces. It is for planning rather than filing, so revisit the estimate when rates or your income change.
This is general information only and not financial advice.
About This Tool: Dividend Tax Calculator Canada
Dividend tax calculator canada: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Tax year 2025 · Data last reviewed 2026-10-19
Frequently asked questions
How does this dividend tax calculator for Canada work?
What is the difference between eligible and non-eligible dividends?
Why is my dividend grossed up?
Does the tool include provincial dividend tax credits?
Are dividends taxed less than salary?
Is my information private?
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