How are eligible dividends taxed differently from non‑eligible dividends?

Eligible dividends come from public corporations with a 38% gross‑up and larger tax credit. Non‑eligible dividends from small businesses have a 15% gross‑up and a smaller credit.

Are dividends or salary better for a business owner?

Salary builds CPP and RRSP room but involves payroll costs. Dividends skip payroll and CPP premiums but do not create RRSP contribution room.

Updated for 2026 – CRA Gross‑Up & DTC Rates

Canada Dividend Tax Calculator 2026

Q: Can dividend income result in zero or negative tax in Canada?

It can reduce your tax to zero, but not below. The dividend tax credit is non‑refundable, so the CRA will not issue a refund for unused credits.

Q: How do I report dividends on my Canadian tax return?

You report the grossed‑up total on Line 12000, enter non‑eligible dividends on Line 12010, and claim federal/provincial credits on Lines 40425 and 61520 (or Line 415 for Quebec).

Estimate your tax on eligible and non‑eligible Canadian dividends. This calculator uses the official CRA gross‑up, federal/provincial tax brackets, and the dividend tax credit to show your real take‑home dividend income after tax.

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All 13 Provinces & Territories

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Eligible & Non‑Eligible

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💰 Dividend Tax Estimator — 2026

Eligible Dividends (cash) *

Non‑Eligible Dividends (cash) *

Other Taxable Income (annual) *

Province of Residence *

Tax Year

Estimates use 2026 CRA gross‑up and tax credit rates. Results are for planning only — refer to your T5/T3 slips and official tax software for filing.

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Enter your dividend income and other earnings, then click Calculate to see your estimated tax breakdown.

Federal Rates

2026 Federal Dividend Tax Credit Rates

The CRA applies a gross‑up to your actual dividend and then offers a non‑refundable tax credit to prevent double taxation.

Dividend Type	Source	CRA Gross‑Up Rate	Federal Tax Credit (% of Grossed‑Up)	Federal Tax Credit (% of Cash Received)
Eligible	Public corporations (TSX stocks)	38%	15.0198%	20.73%
Non‑Eligible	Private small businesses (CCPCs)	15%	9.0301%	10.38%

Provincial Credits

2026 Provincial & Territorial Dividend Tax Credit Rates

Each province provides its own non‑refundable tax credit, applied on provincial Form 428 (or Quebec TP‑1).

Province / Territory	Credit on Eligible Dividends (% of Grossed‑Up)	Credit on Non‑Eligible Dividends (% of Grossed‑Up)
Alberta	8.12%	2.18%
British Columbia	12.00%	1.96%
Manitoba	8.00%	0.78%
New Brunswick	14.00%	2.75%
Newfoundland and Labrador	5.40%	2.18%
Northwest Territories	11.50%	6.00%
Nova Scotia	8.85%	2.99%
Nunavut	5.40%	2.61%
Ontario	10.00%	2.98%
Prince Edward Island	9.80%	1.80%
Quebec	11.78%	3.42%
Saskatchewan	11.00%	3.36%
Yukon	12.00%	0.67%

Provincial credits are applied to the grossed‑up dividend amount. Quebec residents claim the provincial credit on Line 415 of the TP‑1 return.

How to Report

How Dividend Tax Credits Work on Your Return

Once you understand the gross‑up, the filing process follows a few straightforward lines.

Report your grossed‑up dividends

Enter the combined grossed‑up total on Line 12000. Your eligible amount equals Line 12000 minus Line 12010 (non‑eligible portion).

Claim the federal credit

Transfer the total federal dividend tax credit from your slips to Line 40425, or use the worksheet if you didn’t receive a slip.

Claim the provincial credit

Enter your provincial credit on Line 61520 of your provincial Form 428. Quebec residents use Line 415 on the TP‑1.

📋 Where to find your slip numbers

T5 slips – Boxes 12 & 26
T3 slips (trusts/ETFs) – Boxes 39 & 51
T5013 slips (partnerships) – Boxes 131 & 134
T4PS slips (profit‑sharing) – Boxes 26 & 32

All amounts are pre‑calculated on the slips – simply copy them to the correct lines on your return.

❓ FAQ

Dividend Tax Questions – Canada 2026

Clear answers to the most common questions about dividend taxation, gross‑up, and credits.

📬 Need help with a specific dividend scenario? We’re here.

It is a non‑refundable tax credit that prevents double taxation. Since Canadian corporations already paid corporate tax, this credit offsets your personal tax on dividend income.

Eligible dividends come from public corporations with a 38% gross‑up and a larger tax credit. Non‑eligible dividends from small businesses have a 15% gross‑up and a smaller credit.

The CRA gross‑up inflates your cash dividend back to the corporation’s pre‑tax earnings, ensuring your dividend income is taxed fairly compared to salary or interest.

It can bring your tax to zero, but not below. The dividend tax credit is non‑refundable, so the CRA will not issue a refund for unused credits.

Report the grossed‑up total on Line 12000, non‑eligible dividends on Line 12010, and claim federal/provincial credits on Lines 40425 and 61520 (or Line 415 for Quebec).

Salary builds CPP and RRSP room but involves payroll taxes. Dividends skip payroll and CPP premiums but do not create RRSP contribution room.

ℹ️ About This Calculator

This calculator is maintained by the CRACalculator team. It uses the official 2026 CRA gross‑up rates, federal tax brackets, and provincial dividend tax credit percentages. Always verify with your T5/T3 slips and tax software; results are planning estimates only.

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