Net Federal Tax on Dividends
CADNaN
Grossed-Up Dividend
CAD17,250
Gross Tax Before Credit
CADNaN
Federal Dividend Tax Credit
CAD1,558
Effective Rate on Actual Dividend
NaN%
Canadian Dividend Tax Credit Calculator — Actual Dividend Received (C$) ₹15,000
With actual dividend received (c$) of ₹15,000, the net federal tax on dividends is CAD3,722.
Grossed-Up Dividend
CAD13,800
Gross Tax Before Credit
CAD4,554
Federal Dividend Tax Credit
CAD2,073
Net Federal Tax on Dividends
CAD2,481
Effective Rate on Actual Dividend
24.81%
Federal DTC only. Provincial dividend tax credits are additional. Eligible dividends are paid by public corporations or CCPCs that paid full corporate tax. Non-eligible dividends are paid by CCPCs on income taxed at small business rate. Actual rates may vary.
What is the Canadian Dividend Tax Credit Calculator?
Canada uses a "gross-up and credit" system for dividend taxation to avoid double taxation (dividends are paid from after-corporate-tax income). Eligible dividends (from large public corporations or CCPCs that paid full corporate rate) receive a 38% gross-up and a 15.0198% federal DTC. Non-eligible dividends receive a 15% gross-up and a 9.0301% DTC.
Formula
Grossed-Up Dividend = Actual Dividend × (1 + Gross-Up Rate). Gross Tax = Grossed-Up × Marginal Rate. Net Tax = Gross Tax − (Grossed-Up × DTC Rate).- D_gross
- = Grossed-up dividend amount
- r_m
- = Marginal tax rate
- DTC
- = Federal dividend tax credit rate
How to use the Canadian Dividend Tax Credit Calculator
- 1
Step 1
Enter the actual dividend amount received.
- 2
Step 2
Select eligible or non-eligible dividend.
- 3
Step 3
Enter your marginal tax rate.
- 4
Step 4
View your gross-up, DTC, and net tax payable.
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Frequently asked questions
Are eligible dividends taxed less than salary in Canada?
Yes. At a 33% marginal rate, eligible dividends are taxed at an effective federal rate of about 19%, compared to 33% for salary. The provincial DTC further reduces the combined rate.
What is the difference between eligible and non-eligible dividends?
Eligible dividends come from income taxed at the general corporate rate (~26.5%). Non-eligible dividends come from CCPC income taxed at the small business rate (~12.2%). Eligible dividends receive a more generous tax credit.
Sources
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