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Dividend Tax Calculator

Estimate your 2025 Canadian tax on eligible dividends (large public companies) and non-eligible dividends (small business / CCPCs).

Inputs

CAD
CAD
CAD
Eligible dividends are grossed up by 38% then reduced by the federal dividend tax credit of 15.0198% of grossed-up amount. Non-eligible are grossed up by 15% with a 9.0301% federal DTC. Provincial credits vary. This is a simplified model; actual tax may differ.

Total Tax on Dividends

Net federal + provincial tax
$0

How Canadian dividend tax works

Canada's dividend tax credit (DTC) system prevents double-taxation of corporate profits. When a corporation earns income, pays corporate tax, and distributes a dividend, shareholders gross up the dividend by a notional amount representing the corporate tax paid, then apply a dividend tax credit to offset the tax on that grossed-up amount.

Eligible dividends come from Canadian corporations taxed at the general corporate rate (larger companies). The gross-up is 38% and the federal DTC is 15.02% of the grossed-up dividend, resulting in a favourable effective rate. Non-eligible dividends come from Canadian-Controlled Private Corporations (CCPCs) that benefited from the small business deduction. The gross-up is 15% with a 9.03% federal DTC.

At low income levels, eligible dividends can be received with little to no tax. At higher income levels, the combined federal-provincial rate on eligible dividends is still significantly lower than the rate on regular income.

FAQ

What is the gross-up on eligible dividends?
Eligible dividends are grossed up by 38% (multiply by 1.38) before applying the dividend tax credit. So a $1,000 eligible dividend becomes $1,380 of taxable income before the DTC offset.
What makes a dividend "eligible"?
Eligible dividends are designated by the paying corporation and generally come from income taxed at the general corporate rate. Most dividends from publicly traded Canadian companies are eligible. CCPCs often pay non-eligible dividends from income that benefited from the small business deduction.
How does the dividend tax credit work?
After grossing up, you apply the dividend tax credit directly against your tax owing (not your taxable income). The federal DTC is 15.0198% of the grossed-up eligible dividend. Provinces also have their own DTC rates.
Are US dividends eligible for the DTC?
No. The Canadian dividend tax credit only applies to dividends from Canadian corporations. Foreign dividends (including US stocks) are taxed as regular income, though a foreign tax credit may offset some of the withholding tax paid.