Dividends · Ontario
Ontario dividend tax calculator.
Enter the dividends you received and your other income to see the extra tax they cause and what you keep.
Inputs
Dividend tax
Enter the amounts.
How Ontario dividends are taxed
Eligible dividends are grossed up by 38% and non-eligible dividends by 15%. The grossed-up amount is added to income and taxed at the federal and Ontario rates, then credits offset part of the tax: the federal dividend tax credit is 6/11 of the gross-up on eligible dividends (15.0198% of the taxable amount) and 9/13 on non-eligible (9.0301%). Ontario's credit for 2026 is 10.0% of the taxable amount for eligible dividends and 2.9863% for other Canadian dividends.
Worked example. With no other income, a $10,000 non-eligible dividend is grossed up to $11,500, which is below the combined basic personal amounts, so no tax is payable.
Why it is incremental
This tool computes your tax with and without the dividends, so the answer includes any push into a higher bracket, the Ontario surtax and the health premium. It models only the basic personal amount and the dividend credits, and it ignores the old-age security recovery tax, the alternative minimum tax and other credits. The Ontario non-eligible rate falls to 1.9863% for 2027.
Frequently asked questions
How are eligible dividends taxed in Ontario?
They are grossed up by 38%, taxed at regular federal and Ontario rates, then reduced by a federal credit of 15.0198% and an Ontario credit of 10.0% of the taxable amount for 2026.
How are non-eligible dividends taxed in Ontario?
They are grossed up by 15%, then reduced by a federal credit of 9.0301% and an Ontario credit of 2.9863% of the taxable amount for 2026. Small business corporations typically pay non-eligible dividends.
What is the difference between eligible and non-eligible dividends?
Eligible dividends generally come from income taxed at the general corporate rate; dividends paid out of income taxed at the small business rate are generally other than eligible (the Ontario credit page makes the same distinction).
Is there an Ontario dividend tax credit change in 2027?
Yes. The Ministry of Finance lists the other-Canadian-dividend rate as 1.9863% for 2027, down from 2.9863%.
Sources
Checked (retrieved from the publisher)
- CRA Income Tax Folio S3-F2-C2: Taxable dividends from corporations resident in Canada
- Ontario Ministry of Finance: Ontario dividend tax credit
- CRA T4032ON January 2026: Ontario rates, surtax, basic personal amount, health premium
- CRA T4127 Payroll Deductions Formulas, January 2026: federal basic personal amount and its phase-out
- CRA: Canadian income tax rates for individuals, current year
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Scope
Estimate for an Ontario resident, 2026 tax year, using basic personal amounts and dividend credits only. Not tax advice.