Why does Canada use a dividend gross-up and tax credit system?

The system prevents double taxation by integrating corporate and personal taxes so total tax paid equals ordinary income tax rates.

What is the federal Dividend Tax Credit percentage for eligible dividends?

The federal DTC is 15.02% of the grossed-up dividend amount (or ~20.73% of the actual cash dividend received).

CanadaCanadian Dividend Tax Credit (Eligible vs Non-Eligible)Finance & Salary

Canada Dividend Tax Credit (Eligible 138% vs. Non-Eligible 115% Gross-Up) Calculator

Calculate Canadian personal tax on dividend income: Eligible dividends from Canadian public corporations (138% gross-up + 15.02% federal DTC) versus Non-Eligible small business dividends (115% gross-up + 9.03% federal DTC).

Taxes & Duties Dividends & Payouts Investment & Assets

Calculator Inputs

Live Real-Time

Actual Cash Dividend Received (CAD $)

CAD $

Quick select:

Dividend Classification Category

Your Marginal Income Tax Rate (%)35 %

15 %54 %

Calculated ResultCanadian Dividend Tax Credit (Eligible vs Non-Eligible)

Net Tax Payable on Dividends (After Dividend Tax Credit)

8,280CAD $

Net Cash Dividend Income Retained in Hand

21,720 CAD $

Federal Dividend Tax Credit (DTC) Saved

6,210 CAD $

Detailed Calculation Breakdown

Taxable Grossed-Up

41,400 CAD $

Tax Credit Offset

6,210 CAD $

Net Tax Due

8,280 CAD $

Net Cash Kept

21,720 CAD $

Calculation Methodology

Taxable Grossed-Up Amount = Actual Dividend * (1.38 Eligible or 1.15 Non-Eligible). Federal DTC = Taxable Grossed-Up * (15.02% Eligible or 9.03% Non-Eligible).

Important Legal & Educational Disclaimer

The dividend gross-up and tax credit system prevents double taxation on corporate profits distributed to Canadian resident individuals.

This calculator is designed for educational and informational purposes only based on public statutory frameworks. The outputs do not constitute binding financial, tax, or legal advice. We assume no liability for decisions made based on these estimations. Always verify with the relevant official authorities or a certified professional advisor.

Frequently Asked Questions

Eligible dividends come from corporations taxed at the general rate (138% gross-up with higher DTC), while non-eligible dividends come from small CCPCs (115% gross-up).

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Canada

Canada Dividend Tax Credit (Eligible 138% vs. Non-Eligible 115% Gross-Up) Calculator

Calculator Inputs

Detailed Calculation Breakdown

Calculation Methodology

Important Legal & Educational Disclaimer

Frequently Asked Questions

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