Free tool · Personal tax
Ontario dividend tax calculator 2026
Estimate the 2026 tax on eligible and non-eligible dividends for an Ontario resident, together with your other income. See the gross-up, the federal and Ontario dividend tax credits, what you keep and the marginal rate on the next dividend dollar.
An illustration of a dividend being grossed up, reduced by tax credits and paid out, not your result.
Visual labels: Dividend; Gross-up; Tax credits; What you keep.Your scenario
Amounts are displayed in CAD for the 2026 tax year, for an Ontario resident. Enter the dividends you actually received, before the gross-up.
- Dividends received
- $20,000.00
- Net after tax
- $18,572.06
- Tax as a share of the dividends
- 7.14%
- Gross-up added to income
- $7,600.00
- Taxable amount of dividends
- $27,600.00
- Taxable income
- $87,600.00
- Federal dividend tax credit
- $4,145.46
- Ontario dividend tax credit
- $2,760.00
- Total tax including your other income
- $10,845.18
- Marginal rate on the next eligible dollar
- 6.39%
- Marginal rate on the next non-eligible dollar
- 20.28%
The dividend tax is the extra tax your dividends cause on top of the tax on your other income. A marginal rate at or below zero means the credits on the next dividend are at least as large as the tax on it, but the credits cannot be refunded, so they are lost once your tax reaches zero.
Calculated on this device. These inputs are not submitted to Sora.
How the calculation works
Taxable dividends = eligible dividends × 1.38 + non-eligible dividends × 1.15. The grossed-up amount is added to your other income and taxed at 2026 federal and Ontario rates. The federal credit is 15.0198% of the grossed-up eligible amount and 9.0301% of the grossed-up non-eligible amount. Ontario’s credit is 10% and 2.9863%. Each credit reduces only its own government’s tax, after the Ontario surtax is worked out, and neither is refundable. Tax on the dividends = total tax with the dividends − total tax without them, using the same engine as the Ontario income tax calculator.
A worked example
At an illustrative $60,000 of other income and $20,000 of eligible dividends, the gross-up is $7,600, so taxable income is $87,600. The federal credit is $4,145.46 and the Ontario credit is $2,760.00. Total tax rises by $1,427.94, or about 7.14% of the dividends, which leaves $18,572.06. The same $20,000 paid as non-eligible dividends carries a $3,000 gross-up and credits of $2,076.92 and $686.85, so the extra tax is $4,205.73, about 21.03%.
Assumptions and limits
Eligible dividends generally come from public corporations and from private corporations paying out income taxed at the general corporate rate. Non-eligible dividends generally come from income taxed at the small business rate. The corporation tells you which kind it paid, on your T5. Foreign dividends are not grossed up and get no credit, and this tool does not model them. A larger taxable amount can also affect income-tested benefits, which are not included. Ontario’s page lists the credit for non-eligible dividends at 1.9863% from 2027, down from 2.9863%, so a 2027 estimate will differ. Your return decides the final amount.
General educational information. Inputs stay on this device and are not submitted. Confirm the assumptions before using a result in a business decision.
Source and further reading
2026 rates checked October 24, 2026 against the CRA and ontario.ca pages: CRA: T5 guide, gross-up and federal dividend tax credit; CRA: federal dividend tax credit (line 40425); Ontario: Ontario dividend tax credit rates; CRA: tax rates and income brackets for 2026. The examples above use Sora’s own illustrative figures.
Salary vs dividends for owner-managers
About three minutes
Put the result in context.
Discuss the records, assumptions and next decision with Nauman.
Start with your situationPrefer to talk? (289) 489-0841