Capital gains and dividend tax calculator for Canada

Province or territoryWhere you lived on 31 December. It sets your provincial tax.

Net capital gains realizedSale price minus cost and selling expenses, after losses in the same year.CAD

Eligible dividends receivedUsually from Canadian public companies (T5 box 24), before the gross-up.CAD

Interest incomeSavings accounts, GICs, bonds (T5 box 13).CAD

Employment and other incomeYour salary or other income sets the bracket your investment income falls in.CAD

Tax on your investment income

$1,909

Effective rate 15.3 %

Taxable capital gain (50 %)$5,000
Grossed-up eligible dividends (138 %)$2,760
Federal tax on investment income20.5 %−$1,693
Federal dividend tax credit15.02 %+$415
Ontario tax on investment income9.15 %−$756
Ontario dividend tax credit+$276
Ontario Health Premium−$150
Total income for tax$77,595

An estimate under the rules for the chosen year, for typical cases. It is not tax advice: check the result with the tax office or an adviser before you file.

How it is calculated

Only half of a capital gain is added to your income. That taxable half is taxed at your marginal rate, so the effective rate on the whole gain is half your marginal rate.

Eligible dividends from Canadian companies are grossed up by 38 % and added to your income. You then get a federal dividend tax credit of 15.0198 % of the grossed-up amount and a provincial credit. At lower incomes this can bring the tax on dividends close to zero.

Interest is fully taxable at your marginal rate. The calculator adds your investment income to your other income, works out federal and provincial tax both ways, and shows the difference. Each step is its own line: the tax from the brackets, then the basic personal amount and dividend tax credits that lower it.

Other income is treated as employment income, with CPP and EI credits, the basic personal amount, the Canada employment amount and, in Ontario, the LIFT credit for a single filer.
Half of a net capital gain is taxable for 2025 and 2026. The increase to two thirds that was proposed in 2024 was cancelled in March 2025.
Capital losses, loss carry-forwards and the lifetime capital gains exemption are not modelled. Gains on your principal residence are usually tax free and should not be entered.
Eligible dividends are grossed up by 38 %. The federal credit is 15.0198 % of the grossed-up amount; provincial credits range from 5.51 % (Nunavut) to 14 % (New Brunswick).
Non-eligible dividends, foreign dividends and the foreign tax credit are not included.
Alternative minimum tax, Old Age Security recovery tax and Quebec's Health Services Fund contribution on investment income are not included.
Income earned inside a TFSA is tax free, and income inside an RRSP is taxed only when you withdraw it. Do not enter it here.

Questions

Is the capital gains inclusion rate going up to two thirds?

No. The government cancelled the proposed increase in March 2025. Half of a capital gain remains taxable for individuals.

Do I pay tax on gains inside a TFSA or RRSP?

No tax is due on gains, dividends or interest inside a TFSA, and withdrawals are tax free. Inside an RRSP nothing is taxed until you withdraw, and then the withdrawal is taxed as ordinary income.

What is an eligible dividend?

A dividend from a Canadian corporation that paid tax at the general corporate rate, which covers most public companies. Your T5 slip shows it in box 24 and the grossed-up amount in box 25.

Is the sale of my home taxed?

Usually not. The principal residence exemption covers the gain on a home you lived in for every year you owned it. You still need to report the sale on your return.

Sources

Now keep it on track Set the result as a budget in Spendee and see each month how much is left.

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