Eligible vs Non-Eligible Dividend Tax Calculator Canada
This eligible dividend calculator taxes the same Canadian dividend both ways: gross-up, federal and provincial tax credits, after-tax cash and yield.
What it does
The Eligible vs Non-Eligible Dividend Tax Calculator taxes the same Canadian dividend both ways, showing the gross-up, the federal and provincial dividend tax credits, the after-tax cash and the after-tax yield for each treatment.
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 |
|---|---|---|---|
| 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 and territorial dividend tax credit rates as a fraction of the taxable (grossed-up) dividend. | 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. |
| Federal personal income tax brackets and rates for 2026. | Rate schedule | canada.ca | Effective 2026-01-01Verified unchanged at CRA; citation replaced, it previously named a fund manager rather than a government page and carried no URL. |
| Maximum federal basic personal amount for 2026. | 16,452 | canada.ca | Effective 2026-01-01Verified 16452 at the CRA indexation page; the citation was the bare text CRA 2026 with no URL a reader could follow. |
| 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 |
| 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 |
| 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
Grossed up = dividend x (1 + gross-up); Tax = max(0, federal tax on the grossed-up amount - federal credit) + max(0, provincial tax and surtax - provincial credit)
How it works
It grosses the dividend up at the rate for each type, adds it to your other income, measures the extra federal and provincial tax it triggers, then subtracts the federal and provincial dividend tax credits at each level.
Where it is used
- Comparing a public-company dividend with a small-business dividend
- Deciding how to pay yourself from a corporation
- Checking the after-tax yield of a dividend portfolio
Worked example
On CA$10,000.00 in Ontario alongside CA$60,000.00 of other income, the eligible dividend is grossed up to … and taxed …, leaving …. The same cash as a non-eligible dividend is taxed …, leaving … — a difference of …, or … against … in after-tax yield.
The calculator taxes the same Canadian dividend twice, once as eligible and once as non-eligible, so you can see what the classification is worth in after-tax cash. The two look identical when the money lands in your account but are taxed at quite different rates, which matters to anyone comparing a public company dividend with a payment from their own corporation.
What the eligible dividend calculator shows
Enter the dividend, the province or territory you file in, and your other taxable income. The tool returns the grossed-up amount for each type, the tax on each, the dividend tax credits actually used, the after-tax cash, the effective tax rate, and the after-tax yield if you enter the value of the holding. The advanced options annualize a dividend paid quarterly or monthly and set the holding value for the yield.
How the gross-up and credit system works
A company pays corporate tax, then distributes what is left as a dividend, and the shareholder is taxed again. The gross-up and credit mechanism offsets that. The dividend is grossed up to approximate the pre-tax profit behind it, that figure is added to your income and taxed at your marginal rates, and you get a credit for the corporate tax already paid. Done correctly, the combined corporate and personal tax lands close to what you would have paid earning the income directly.
There are two gross-up rates because there are two corporate rates. Income taxed at the general corporate rate carries a 38% gross-up and a large credit and becomes an eligible dividend. Income that received the small business deduction carries a 15% gross-up and a smaller credit and becomes a non-eligible dividend. Non-eligible dividends therefore bear more personal tax, balancing the lighter corporate tax paid first.
Federal and provincial credits
The federal dividend tax credit is a fixed fraction of the grossed-up dividend, the same across the country. Each province and territory sets its own credit, and the range is wide, which is where much of the provincial variation comes from. This tool applies both, and for Quebec residents it applies the federal abatement to federal tax and the federal credit.
Both credits are non-refundable: they can reduce the tax on the dividend to zero but not below, and each level’s credit is limited to the tax that level charges. That is why the credits reported as used can be smaller than the rates alone would generate.
Why the gross-up pushes other thresholds around
Income-tested amounts are measured against net income, and the grossed-up figure is what counts, not the cash received. A $10,000 eligible dividend adds $13,800 to the income used to test the Old Age Security recovery tax, the age amount and various provincial supplements. The tax on the dividend itself can look modest while the knock-on effects are not. This calculator measures the direct tax only.
A worked example
$10,000 of dividends in Ontario on top of $60,000 of other income. As an eligible dividend it grosses up to $13,800. Dividend tax credits of $3,335.43 offset most of the tax, leaving $756.27 owing and $9,243.73 in hand, an effective rate of 7.56%.
As a non-eligible dividend it grosses up to $11,500, but the credits are only $1,381.89. Tax rises to $2,027.86 and after-tax cash falls to $7,972.14, an effective rate of 20.28%. The classification is worth $1,271.60 on this one payment. On a $250,000 holding, that is the difference between a 3.70% and a 3.19% after-tax yield.
Higher incomes widen the gap. $25,000 of dividends in British Columbia on $150,000 of other income costs about $4,820 as eligible and about $8,542 as non-eligible, a difference of about $3,721. At low incomes it can reverse: $8,000 of eligible dividends in Alberta on $20,000 of other income attracts no tax at all, because the basic personal amounts and credits absorb it, while the non-eligible version still costs about $771.
What the calculator does not model
It measures the tax on the dividend against your other income. It does not model the Old Age Security recovery tax or other income-tested clawbacks, alternative minimum tax, refundable dividend tax inside a corporation, capital gains, foreign dividends (which do not get these credits), dividends in registered accounts (where none of this applies), or Quebec’s separate provincial return. It assumes Canadian-source dividends in a taxable account.
Assumptions and limits
The gross-up rates, both credit tables, the federal and provincial brackets, the basic personal amounts and the Ontario surtax are maintained data and change each tax year; provincial credits in particular change more often than most people notice. This is an estimate, not tax advice. Confirm your position with a qualified adviser before acting on it.
About This Eligible Dividend Calculator
Use this eligible dividend calculator 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 2026 · Data last reviewed 2026-10-19
Frequently asked questions
What makes a dividend eligible or non-eligible?
Why is the dividend grossed up at all?
Why is the eligible gross-up higher than the non-eligible one?
Can an eligible dividend be taxed at zero?
Does the province change the answer much?
What is after-tax yield?
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