How to use the dividend tax credit calculator
- 1 Enter the cash dividends you received.
- 2 Choose eligible or non-eligible, as shown on your T5 slip.
- 3 Enter your other taxable income.
- 4 Choose your province or territory and read the tax.
Worked example
$10,000 of eligible dividends in Ontario with $60,000 of other income. The taxable amount is $13,800. After the federal credit of $2,072.73 and Ontario credit of $1,380, the extra tax is $788.97, an effective rate of 7.89%, so you keep $9,211.03. The same amount of non-eligible dividends costs $2,027.86 in tax.
Paying less tax on dividends
- Hold Canadian dividend stocks in a taxable account, where the credit helps.
- Hold foreign dividends in an RRSP.
- Mind the OAS clawback from the gross-up.
- Check your T5 slip for the dividend type.
See all rates with the Marginal Tax Rate Calculator, gains with the Capital Gains Tax Calculator, and tax-free room with the TFSA Room Calculator.
Features
Gross-up and credits
Federal and provincial dividend tax credits for 2026.
Real extra tax
Compares your tax with and without the dividend.
Every province
All 13 provincial and territorial credit rates.
When to use it
Investors
Compare dividend income with interest and gains. See all rates in the Marginal Tax Rate Calculator.
Business owners
Compare paying yourself dividends with salary. See CPP on salary with the CPP and EI Calculator.
Retirees
Dividends can still affect OAS. Check the OAS Clawback Calculator.
TFSA or taxable account
Dividends in a TFSA are tax-free. Compare with the TFSA Room Calculator.
Related Tax tasks
Frequently asked questions
How does the dividend tax credit work?
You add a gross-up to the dividend (38% for eligible, 15% for non-eligible), pay tax on that larger amount, then subtract federal and provincial dividend tax credits. The result is a lower tax rate than on interest or salary.
What is an eligible dividend?
A dividend paid from income taxed at the general corporate rate, usually by public companies and larger private companies. Your T5 slip shows it in box 24.
What is a non-eligible dividend?
A dividend from income taxed at the small business rate, usually from a small Canadian-controlled private corporation. It gets a smaller gross-up and credit.
What are the 2026 dividend tax credit rates?
Federally, 15.0198% of the grossed-up amount for eligible dividends and 9.0301% for non-eligible. Ontario adds 10% and 2.9863%; British Columbia 12% and 1.96%; Alberta 8.12% and 2.18%.
Can dividends be tax-free?
At low incomes, eligible dividends can be taxed at 0% or even a negative rate that reduces tax on other income. The credit is non-refundable, so it cannot create a refund on its own.
Do dividends affect OAS and other benefits?
Yes. The grossed-up amount counts as net income, which can increase the OAS clawback and reduce income-tested benefits.
Are foreign dividends eligible?
No. Dividends from foreign companies do not get the gross-up or credit and are taxed like interest.
Is the gross-up real money?
No. It is a notional amount added to taxable income to calculate the credit. You only receive the cash dividend.
Will rates change in 2027?
Ontario has announced a lower non-eligible credit for 2027, and other provinces may change their rates. We review this calculator each January.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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