Canadian Dividend Tax Calculator 2025Gross-up + Dividend Tax Credit, federal and provincial
Canadian dividends aren't taxed at flat rates. They're grossed up, taxed at your marginal rate, then offset by federal and provincial Dividend Tax Credits. This calculator shows every step so you can see the true effective rate at your income.
Guidance, not advice. This calculator runs the rules as published, it doesn't assess your circumstances. Your actual tax may be affected by factors it doesn't cover (allowances used elsewhere, reliefs, marriage allowance, scheme-specific adjustments). Always seek financial or tax advice from your accountant, or contact CRA. Read our editorial scope →
Your dividends
Salary, self-employment, interest, rental — anything taxed before dividends stack on top.
How your dividend is taxed
Dividend received (cash)
$50,000
Grossed-up amount (added to taxable income)
Eligible ×1.38, non-eligible ×1.15 — approximates the pre-tax corporate income.
$69,000
Federal tax on the dividend slice
Tax on total income minus tax on other income — captures bracket stacking.
$10,703
Federal Dividend Tax Credit
-$10,364
Net federal tax on dividends
$339
Ontario tax on the dividend slice
$4,145
Ontario Dividend Tax Credit
-$6,900
Net Ontario tax on dividends
-$2,755
Net tax on your dividends
-$2,416
Effective dividend tax rate
-4.83%
Negative — DTC exceeds tax owed on this slice.
Marginal eligible rate (next $1)
6.39%
Marginal non-eligible rate (next $1)
20.39%
Effective dividend tax rate by other income — major provinces
| Other income | Eligible (ON) | Eligible (BC) | Eligible (AB) | Eligible (QC) | Non-eligible (ON) |
|---|---|---|---|---|---|
| $0 | -7.55% | -10.29% | -0.88% | 2.58% | 8.78% |
| $50,000 | 0.78% | -2.80% | 3.73% | 11.07% | 14.79% |
| $100,000 | 8.00% | 5.61% | 10.16% | 20.04% | 21.54% |
| $150,000 | 18.13% | 18.88% | 20.26% | 32.04% | 30.18% |
| $250,000 | 27.81% | 31.54% | 31.56% | 38.97% | 38.01% |
Rates are on a $10,000 dividend marginal to the income shown. Green = negative effective rate (the DTC more than offsets tax on this slice — a planning win for CCPC owners extracting at low personal income).
How Canadian dividend tax actually works
Why the gross-up?
Canada taxes corporations and individuals as an integrated system. The gross-up approximates the pre-tax corporate income that generated the dividend, so it's taxed on the same base whether you earn it personally or through a company.
Why the DTC?
The Dividend Tax Credit gives you credit for tax the corporation already paid. Federal + provincial DTCs roughly equal the corporate tax rate that produced the dividend — eligible DTCs are calibrated against the general corporate rate; non-eligible DTCs against the SBD rate.
Eligible vs non-eligible
Eligible dividends come from a company's GRIP balance — income taxed at the general rate. Non-eligible dividends come from a CCPC's LRIP — income that benefited from the Small Business Deduction. Your T5 slip tells you which is which (boxes 24/25 vs 10/11).
Why rates differ by province
Each province sets its own DTC rate. Provinces with high corporate rates (e.g. NB, NS) tend to have higher provincial DTCs; Alberta's low corporate rate goes with a smaller DTC. This is why effective dividend rates vary so much across the table above.