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Dividend Income Calculator: How Much Tax Will You Pay on Your Dividends?

Your Canadian dividends are taxed on a bigger grossed-up amount, then a federal and Ontario credit brings the tax back down. Type the cash dividends you received, their type, and your other income, and this page reads you the estimated tax for 2026: federal and Ontario tax on your dividends; the tracker and a tax pro handle the rest of the picture. The math runs in your browser; the numbers you type are never sent anywhere.

Your numbers

Your dividends

Cash dividends received this year ($)

The actual amount that landed in your account, before any gross-up. Your T5 or T3 slip shows it as the actual amount.

Dividend type Eligible Non-eligible

Your slip shows the type. Most dividends from Canadian public companies are eligible; dividends from a small business corporation are often non-eligible.

Your other income

Your other taxable income for the year, before these dividends ($)

Salary, self-employment income, interest, and everything else taxable, added together. The dividends sit on top of this amount, so it decides which tax brackets they land in.

Estimated tax on your dividends Your number is waiting

Type your numbers above to see the tax on your dividends.

Taxable amount $0 The grossed-up amount that goes on your return.

Gross-up $0 The amount added on top of the cash you received.

Federal dividend tax credit $0 Comes off your federal tax.

Ontario dividend tax credit $0 Comes off your Ontario tax.

Effective tax rate 0 The tax as a share of the cash dividends you received.

You keep after tax $0 Cash dividends minus the tax they add.

Taxable amount = cash dividends grossed up. Tax on the dividends = tax on your income with the dividends, minus tax on your income without them, credits included.

The formula in plain words: the gross-up raises the cash to roughly the profit the company earned before its own tax. Your brackets tax that bigger amount, and the two dividend tax credits then hand back the company tax that was already paid. What is left is the tax your dividends really add.

Picture your dividends landing each quarter with the tax already planned for.

What this free calculator did not calculate. Federal and Ontario income tax only, for 2026, on one kind of dividend in one year. No Ontario surtax and no Ontario Health Premium. No credits or deductions beyond the basic personal amounts, and no high-income reduction to the federal basic personal amount. No capital gains, no foreign dividends, and nothing inside a TFSA or RRSP. The Dividend Income Tracker keeps every holding, payout, and currency conversion in one place all year, and a tax pro handles your full return.

Take your dividend tax number with you

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How the dividend income calculator works

Updated November 2026

Why dividends are grossed up

A dividend is paid from profit the company already paid tax on. To keep the system fair, your return first grosses the dividend up to roughly that pre-tax profit, taxes it at your rates, and then gives you a dividend tax credit for the company tax already paid. The gross-up is 38 percent for eligible dividends and 15 percent for non-eligible dividends, because the two kinds come from income taxed at different corporate rates.

The steps, in plain words

Four steps, and the calculator above runs exactly these:

Step 1: the taxable amount. Cash dividends times 1.38 for eligible dividends, or times 1.15 for non-eligible dividends. That grossed-up amount is what goes on your return.

Step 2: the credits. The federal dividend tax credit is 15.0198 percent of the taxable amount for eligible dividends and 9.0301 percent for non-eligible dividends. The Ontario credit is 10 percent of the taxable amount for eligible dividends and 2.9863 percent for non-eligible dividends.

Step 3: the tax with and without. The calculator works out your 2026 federal and Ontario tax twice: once on your other income alone, and once on your other income plus the taxable amount, with the credits taken off the second run. Each run uses the real bracket schedules and takes the basic personal amount off at the lowest rate, and no run can go below zero, because the credits are non-refundable.

Step 4: the difference. The tax with the dividends minus the tax without them is the tax your dividends add. Dividing it by the cash you received gives the effective rate.

A worked example

Take the numbers this calculator opens with. Cash dividends of $10,000, all eligible, on top of $60,000 of other taxable income, for 2026 in Ontario.

Step 1: $10,000 times 1.38 gives a taxable amount of $13,800.00, a gross-up of $3,800.00. Step 2: the federal credit is $2,072.73 and the Ontario credit is $1,380.00, for total credits of $3,452.73. Steps 3 and 4: the dividends add $756.27 of federal tax and -$117.30 of Ontario tax. The Ontario slice is negative because the Ontario credit, 10 percent of the taxable amount, is worth more than the Ontario tax on that slice at this income, so it lowers the tax on the other income too. The total tax on the dividends is $638.97, an effective rate of 6.39 percent on the cash, and you keep $9,361.03 after tax. Change any one input and every one of those numbers moves; that is what the fields above are for.

How to read your result

The tax on your dividends is the headline: what the dividends add to your 2026 federal and Ontario tax bill, after both credits. The effective rate puts that tax against the cash you actually received, which is the fair way to compare dividends with interest or salary. The taxable amount still matters on its own: it is the figure that counts as income on your return, even though the cash was smaller. Test your other income a bracket higher and lower before you trust one answer, because the dividends land on top of it.

What the math takes as given, and what it leaves out

The math covers federal and Ontario income tax for 2026, with the basic personal amount as the only other credit, at its full amount for every income. It leaves out the Ontario surtax, the Ontario Health Premium, the Ontario tax reduction, and every other credit and deduction. It leaves out the high-income reduction to the federal basic personal amount. It covers one kind of Canadian dividend in a taxable account: foreign dividends get no gross-up and no credit, and dividends inside a TFSA or RRSP are not taxed this way at all. Your real return can differ, so treat the result as an estimate, not a filing.

The record-keeping side of the same dividends

Tax is only half the work. The other half is knowing what each holding paid, when the next payout lands, and what your yield on cost really is. The Kollaz Money guide Dividend Income Tracker: Worked Example walks through that record-keeping with real numbers. And if your room allows it, sheltering the dividends beats trimming their tax: the free TFSA contribution room calculator works out how much room you have.

Sources

Canada Revenue Agency, Current year tax rates and income brackets (2026): the federal brackets (14 percent to $58,523, then 20.5, 26, 29 and 33 percent) and the Ontario brackets (5.05 percent to $53,891, then 9.15, 11.16, 12.16 and 13.16 percent). canada.ca, checked November 10, 2026.
Canada Revenue Agency, Federal Worksheet (Form 5000-D1): the gross-up factors (times 138 percent and times 115 percent) and the federal dividend tax credit chart for line 40425 (15.0198 percent and 9.0301 percent of the taxable amount). Checked November 10, 2026.
Canada Revenue Agency, Worksheet ON428 (Form 5006-D), line 61520 chart: the Ontario dividend tax credit (10 percent of the taxable amount for eligible dividends, 2.9863 percent for other dividends). The Ontario dividend tax credit page at ontario.ca lists the same rates for the 2020 to 2026 tax years. Checked November 10, 2026.
Canada Revenue Agency, Forms TD1 and TD1ON (2026): the basic personal amounts, $16,452 federal and $12,989 Ontario. Checked November 10, 2026.

Educational information only, not tax or financial advice. Consider a qualified tax professional for decisions about your specific situation.

Frequently asked questions

How are Canadian dividends taxed?

Canadian dividends are taxed in three steps. First, the cash you received is grossed up on your tax return: by 38 percent for eligible dividends and 15 percent for non-eligible dividends. Second, that bigger grossed-up amount is taxed at your normal federal and Ontario rates, on top of your other income. Third, a federal and an Ontario dividend tax credit come off the tax, to allow for the tax the company already paid. This calculator runs all three steps for 2026.

What is an eligible dividend?

An eligible dividend is paid from income the company was taxed on at the higher general corporate rate. Most dividends from Canadian public companies are eligible. A non-eligible dividend is paid from income taxed at the lower small business rate, often by a Canadian-controlled private corporation. Your T5 or T3 slip shows which kind you received, and the two kinds carry different gross-ups and different credits, so the type changes your tax.

Why can the tax on my dividends be zero or negative?

At lower incomes, the dividend tax credits and your basic personal amounts can cover all the tax on the grossed-up amount. The Ontario credit for eligible dividends is 10 percent of the grossed-up amount, which can be more than the Ontario tax on that slice, so the dividends can even lower the tax on your other income a little. The credit is non-refundable, so it can bring your tax to zero but cannot pay you a refund on its own.

What does this calculator leave out?

It covers federal and Ontario income tax on one kind of Canadian dividend for 2026, with the basic personal amount as the only other credit. It leaves out the Ontario surtax, the Ontario Health Premium, and every other credit and deduction. It also leaves out the high-income reduction to the federal basic personal amount, capital gains, foreign dividends, and dividends inside registered accounts like a TFSA or RRSP, which are not taxed this way. Your real return can differ, so treat the result as an estimate.

Where does my information go when I use this calculator?

The calculation runs entirely in your browser on your own device, and the numbers you type are never sent to us or stored. Like every Kollaz page, this one counts visits with cookies only if you accept them; the consent banner explains that choice, and it is yours to decline. The signup form on this page sends only the email address you type into it, and your first name if you add it, when you press its button. Signing up takes one more step: we email you a link, and clicking it is what subscribes you.

Is this tax advice?

No. It is arithmetic on the numbers you type, using the published 2026 federal and Ontario rates and credits. It does not know your full return, your other credits, or your life. For decisions about your specific situation, talk to a qualified tax professional.