Dividend Tax Calculator

Enter a dividend, pick its type and your province, and see the personal tax after the gross-up and the federal and provincial dividend tax credits. The credits are measured against your other income, so bracket effects are included. Rates are current for the 2025 tax year.

2025 tax year rates All 13 provinces Updates as you type

Your dividend

$
$

How it works. The dividend is grossed up — by 15% for non-eligible or 38% for eligible — and that larger figure is stacked on top of your other income to measure the extra tax it causes. Federal and provincial dividend tax credits then come off, because the corporation already paid tax on the same profit. What remains is your personal tax on the dividend.

Tax on the dividend

$0

0% effective rate on the $0 cash received

You keep $0 Tax $0
Grossed-up (taxable) amount$0
Tax before credits$0
Dividend tax credits$0
Tax payable on the dividend$0

Gross-up is 15% for non-eligible and 38% for eligible dividends; the credits offset corporate tax already paid — integration in action.

An estimate is a starting point. Get your real number.

This calculator uses published rates. Your actual position depends on the credits, deductions and structure behind your numbers.

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How Tax and Dividend Calculator Works

A dividend is paid out of profit the corporation has already paid tax on, so the personal system does two things to avoid taxing it twice at full rates. First it grosses the dividend up — non-eligible dividends by 15%, eligible dividends by 38% — to approximate the pre-tax corporate profit, and taxes that larger figure at your marginal rates. Then it hands back federal and provincial dividend tax credits calculated on the grossed-up amount, standing in for the corporate tax already paid. Eligible dividends come from profit taxed at the general corporate rate, so they carry the bigger gross-up and the bigger credit, and end up with less personal tax than non-eligible dividends from small-business-rate profit.

Because the grossed-up amount stacks on top of your other income, the same dividend costs more in a high-income year — this calculator measures that directly rather than reading a flat rate off a table. At low incomes the credits can be worth more than the extra tax the dividend adds, which is why the effective rate on eligible dividends can fall to zero (the credit is non-refundable, so it never goes below that). Your T5 slip reports the two types separately, each with its own grossed-up taxable amount and credit.

What this calculator does not cover

Foreign dividends get no gross-up and no dividend tax credit — they are taxed as ordinary income, usually after foreign withholding tax, so this tool does not apply to them. It also ignores the alternative minimum tax, which can bite when a return is dominated by dividends and other preferentially taxed income. And it answers only what a dividend costs, not whether a dividend is the right way to pay yourself — for that comparison, run the salary vs dividend calculator or talk to us about corporate tax planning for owner-managers.

2025 gross-up and federal credits
TypeGross-upFederal credit (of grossed-up)
Eligible 38%15.02%
Non-eligible 15%9.03%

Rates reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. Federal and provincial rates change annually, and this tool is an estimate for planning rather than tax advice. Confirm current figures before relying on them for a filing.

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Frequently asked questions

The dividend is grossed up — by 15% for non-eligible or 38% for eligible dividends — and the grossed-up amount is taxed at your marginal rates on top of your other income. Federal and provincial dividend tax credits then reduce the bill to reflect corporate tax already paid on the same profit. The net result is usually less tax than the same amount of salary or interest would attract.
Eligible dividends are paid from profit taxed at the general corporate rate — typically public companies, or a CCPC’s income above the small business limit. Non-eligible dividends come from profit that got the small business deduction. Because less corporate tax was paid on that profit, non-eligible dividends carry a smaller gross-up and credit and more personal tax.
The gross-up restates your cash dividend as the pre-tax corporate profit it came from, so the personal system can tax the whole profit at your rates. The dividend tax credit then refunds the corporate layer. Together the two steps are called integration: in theory, earning profit through a corporation and paying it out should cost about the same total tax as earning it directly.
Not automatically — integration keeps the total tax close, so the decision usually turns on other factors. Salary creates RRSP room and CPP entitlement but costs CPP contributions; dividends are simpler and skip CPP both ways. Run both routes on your own numbers with the salary vs dividend calculator before deciding.
Often very little. The dividend tax credits are calculated on the grossed-up amount regardless of your bracket, so at low incomes they can fully offset the tax the dividend adds — the effective rate on eligible dividends can reach zero. The credit is non-refundable, though: it can eliminate the tax on the dividend but never generates a refund on its own.

What Canadians search about this

Answered plainly. Browse every question in the Canadian tax answers directory.

A refund is the tax already paid minus the tax actually owed. Add the income tax withheld on your slips to any instalments you paid, work out tax payable on your total income after deductions and credits, and the difference comes back if the first figure is larger. Large refunds usually trace to over-withholding on employment income, RRSP contributions, or credits transferred to you. Run the numbers through the CRA's or a commercial estimator before you file.
Yes, the CRA does telephone people, usually about a balance owing, a missing return, an audit or to verify information, and calls can come from many different numbers, so caller ID proves nothing either way. A real agent never demands payment by gift card, cryptocurrency or e-transfer, never threatens immediate arrest or deportation, and never asks for a password. If a call feels wrong, hang up, check your balance and mail in My Account, then call back using a number from canada.ca.
Income tax starts once taxable income passes the basic personal amount, and a separate provincial or territorial amount applies on top, so the break-even point shifts every year with indexation and differs by where you live. Look up the current amounts on the CRA site or in the year's return package. Credits for tuition, disability, pension income or dependants push the point higher. Filing can still be worthwhile or required with no tax owing, for benefits and credits.
Yes. Maternity and parental benefits are taxable income for the year you receive them and appear on the benefits slip Service Canada issues. Tax is withheld at source, usually at a rate below your overall rate, so a balance owing at filing is normal, particularly if you worked part of the year or your employer added a top-up. Quebec parental insurance benefits are taxable in the same way and come with their own slip.
Neither, strictly: the brackets apply to taxable income. You begin with total income, subtract deductions such as RRSP contributions, union dues and childcare to reach net income, then take the remaining deductions to reach taxable income, and the rates apply to that. Credits are different again and come off the tax itself, starting with the federal basic personal amount of $16,452 for 2026, which tapers for high earners.
Rent paid on your own home is not deductible on the federal return, so most tenants report nothing. Rent does belong on the return in three cases: you are claiming a provincial benefit that is based on rent, such as the Ontario energy and property tax credit or the Manitoba renters tax credit; you are deducting a work-space-in-the-home share as an employee or a self-employed person; or you received rent as a landlord, which is taxable income.
Udit Gupta, founder of Tax Filings Canada

Rates and method reviewed by Udit Gupta

Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA

Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. He is Big 4 trained, at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia. In 2014 he founded his accounting practice to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.

The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023

Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.

Sources. CRA — Corporations · CRA — Corporation tax rates · Income Tax Act (Justice Laws Website)

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