2025 Tax Comparison of Canadian Dividends vs Interest

Tax Comparison Calculation Information

Taxes Payable on Canadian Eligible Dividends

Taxes Payable on Canadian Non-Eligible Dividends

Taxes Payable on Other Income - (foreign dividends, interest, etc.)

Tax Comparison Calculation Information

The calculations below of taxes payable assume that:

the income is earned by a single person, and
there is no other type of income included in taxable income.

Notes:

The Canada Carbon Rebate is not included.
ON provincial tax includes Ontario Health Premium.
QC total tax is net of the refundable federal tax abatement.
QC provincial tax includes progressive health contribution and prescription drug premiums (for both spouses in married person case).

The tax rates used are as known on July 24, 2025.

Taxes Payable on Canadian Eligible Dividends

Due to the alternative minimum tax changes for 2025, there is no alternative minimum tax in any of the cases below.

Note: Eligible dividends gross-up % is 38%, as it has been since 2012.

The NT & NU refundable amounts are from their cost of living tax credits.

TaxTips.ca 2025 Taxes on Eligible Dividends
Actual	$20,000	$70,000	$120,000	$200,000
Taxable	27,600	96,600	165,600	276,000
AB	$0	$0	$6,506	$28,274
BC	0	0	6,091	22,291
MB	0	1,936	14,299	41,532
NB	0	0	6,091	25,147
NL	0	4,502	17,304	47,302
NS	0	3,599	16,042	45,655
NT	(507)	(942)	5,149	21,349
NU	(552)	(1,500)	5,770	28,276
ON	300	750	7,878	35,004
PE	0	1,154	12,425	38,009
QC	693	2,763	16,971	46,290
SK	0	0	6,091	25,780
YT	0	0	6,091	22,291

Taxes Payable on Canadian Non-Eligible Dividends

Note: Non-eligible dividends gross-up % is 15%, as it has been since 2019.

The NT & NU refundable amounts are from their cost of living tax credits.

There is no alternative minimum tax at any level of non-eligible dividends in 2025 when dividends are the only income, because regular tax is always higher than the minimum tax.

TaxTips.ca 2025 Taxes on Non-Eligible Dividends
Actual	$20,000	$70,000	$120,000	$200,000
Taxable	23,000	80,500	138,000	230,000
AB	$0	$6,761	$19,132	$45,722
BC	0	6,117	18,855	48,829
MB	579	10,433	26,899	59,780
NB	0	8,889	23,939	54,862
NL	0	9,023	24,039	54,592
NS	644	11,703	28,649	63,341
NT	(450)	2,510	12,743	36,911
NU	(460)	3,074	14,044	38,561
ON	180	6,352	20,504	52,663
PE	162	11,030	28,038	61,629
QC	244	11,136	28,891	64,190
SK	0	8,371	21,984	50,047
YT	286	7,634	20,739	48,546

Taxes Payable on Other Income - (foreign dividends, interest, etc.)

TaxTips.ca 2025 Taxes on Other Income
Actual	$20,000	$70,000	$120,000	$200,000
Taxable	20,000	70,000	120,000	200,000
AB	$561	$12,583	$28,122	$58,813
BC	561	12,003	27,115	60,274
MB	968	14,842	32,630	68,081
NB	561	14,750	32,636	67,315
NL	561	15,193	33,393	68,408
NS	1,237	16,277	35,351	72,469
NT	277	11,191	26,608	58,474
NU	190	9,657	23,807	53,091
ON	706	12,762	29,273	65,512
PE	720	15,450	34,442	70,897
QC	687	16,166	35,641	74,333
SK	615	14,203	30,992	63,468
YT	809	12,345	27,483	58,184

Canadian Dividends Not Best For All Situations

Sometimes the dividend gross-up can increase net income enough to cause a loss or reduction of other government benefits, such as GIS, GST/HST credit, Pharmacare or other benefits.

Tax Tip: Interest and foreign dividends are not as tax-efficient as Canadian dividends!

Revised: September 28, 2025