Canadian Dividend Tax Calculator 2026
Calculate federal and provincial tax on eligible or non-eligible dividends, including the dividend tax credit (DTC) and gross-up, for all Canadian provinces and territories.
Your Dividend
The cash amount on your T5 — it will be grossed up by 38% for tax purposes.
Employment, business, pension and other income before the dividend — sets which brackets the grossed-up dividend stacks into.
2026 tax year — verified June 2026. Federal DTC: 15.0198% of grossed-up amount (ITA s.121).
Results
Total Tax on Dividend
Federal $756.27 + provincial $0.00 (after DTC)
After-Tax Dividend
Dividend minus total tax
Effective Rate
Tax ÷ actual dividend
Grossed-Up Amount
Taxable income added: +38%
Total DTC Applied
Fed $2,072.73 + prov $1,380.00
Step-by-step
1. Actual dividend: $10,000.00
2. Grossed-up (×1.38): $13,800.00 (+$3,800.00)
3. Incremental federal tax (before DTC): $2,829.00
4. Federal DTC (15.0198% × grossed-up): −$2,072.73
5. Net federal tax: $756.27
6. Incremental provincial tax (before DTC): $1,262.70
7. Provincial DTC (10.0000% × grossed-up): −$1,380.00
8. Net provincial tax: $0.00
9. Total tax: $756.27 (effective 7.56%)
Ontario/PEI surtaxes, the Ontario health premium, AMT, and any provincial refundable credits are not modelled. Quebec residents pay Quebec income tax and receive the 16.5% federal abatement — both are included above.
Estimates for the 2026 tax year. Ontario/PEI surtaxes, the Ontario health premium, AMT and credits other than the basic personal amount and DTC are not modelled. Verify with CRA My Account or a tax professional.
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Frequently asked questions
What is the gross-up on Canadian dividends?
Eligible dividends (from public corporations or large CCPCs) are grossed up by 38% — so a $10,000 dividend adds $13,800 to your taxable income. Non-eligible dividends (from small businesses or CCPCs using the small business deduction) are grossed up by 15%, adding $11,500 to income on a $10,000 dividend. The gross-up restores the dividend to a pre-corporate-tax equivalent.
How does the dividend tax credit (DTC) work?
After including the grossed-up dividend in income, you subtract the DTC directly from your federal tax. For eligible dividends, the federal DTC is 15.0198% of the grossed-up amount (20.73% of the actual dividend). For non-eligible dividends, it is 9.0301% of the grossed-up amount. Each province also has its own DTC, which reduces your provincial tax. The combined effect means eligible dividends at middle incomes typically face lower effective tax than salary or interest.
What is the difference between eligible and non-eligible dividends?
Eligible dividends come from corporations taxed at the full (general) corporate rate — public corporations and CCPCs not benefiting from the small business deduction. Non-eligible dividends come from income that was taxed at the lower small business rate (~9%) or from passive income. Because eligible dividends originate from higher-taxed corporate income, the federal DTC and gross-up are more generous to maintain integration with the personal tax system.
Can the dividend tax credit make my effective tax rate negative?
Yes, at lower incomes the combined federal and provincial DTC can exceed the incremental tax on the grossed-up dividend. This produces a small negative net tax on the dividend — meaning the dividend effectively reduces your overall tax. This is most common for eligible dividends at incomes below about $50,000 in most provinces.
Are dividends in a TFSA or RRSP taxed?
No. Dividends (and all investment income) grow tax-free inside a TFSA and tax-deferred inside an RRSP. Dividend tax credits do not apply inside registered accounts — instead, RRSP withdrawals are taxed as ordinary income at your marginal rate. For non-registered accounts, the gross-up and DTC mechanism applies.
Why does Quebec show a different result?
Quebec residents pay Quebec provincial income tax (administered by Revenu Québec) instead of federal tax on a portion of their income. The federal government provides a 16.5% abatement on basic federal tax for Quebec residents, which is reflected in this calculator. Quebec also has its own provincial DTC rates (11.9% of grossed-up for eligible, ~7% for non-eligible).