Seniors Tax Comparison of Canadian Dividends vs Other Investment Income 2012 and 2011

The tables on this page compare taxes payable by province in 2012 and 2011 for two different types of income:

Canadian eligible dividends, and
other income, such as interest and foreign dividends.

The calculations assume that the income is received by a single senior. The tax rates used are as known on November 10, 2012.

The total income in each case includes:

$6,000 of Old Age Security
$6,000 of Canada Pension Plan retirement income
$24,000 of pension income eligible for the pension tax credit
plus either
1. $30,000 of Canadian eligible dividends, or
2. $30,000 of other income, which could be interest, foreign dividends, pension income, or other income with no special tax treatment.

Income Type	Total Income	Taxable Income	Total Federal + Provincial Income Taxes Payable in 2012
Income Type	Total Income	Taxable Income	AB	BC	MB	NB	NL	NS	NT	NU	ON	PE	QC	SK	YT
A. Cdn Eligible Dividends	$66,000	$76,224	$8,380	$7,745	$11,949	$8,939	$9,526	$12,112	$5,817	$6,715	$9,694	$11,153	$13,412	$9,386	$6,759
B. Other Income	66,000	66,000	14,031	13,600	16,092	15,233	15,283	16,635	12,070	10,778	13,821	16,356	18,240	15,174	13,547

Notes:

Clawback of OAS ($1,176) is included as taxes payable - the clawback only occurs in the Canadian eligible dividends case
BC includes MSP premiums payable for 2013 based on 2012 income
Ontario - includes Ontario Health Premium
QC includes health contribution, contribution to the health services fund, and prescription drug insurance plan premiums

Income Type	Total Income	Taxable Income	Total Federal + Provincial Income Taxes Payable in 2011
Income Type	Total Income	Taxable Income	AB	BC	MB	NB	NL	NS	NT	NU	ON	PE	QC	SK	YT
A. Cdn Eligible Dividends	$66,000	$76,705	$8,343	$7,602	$10,691	$8,924	$9,545	$12,085	$5,789	$6,609	$9,743	$11,111	$13,470	$9,394	$6,731
B. Other Income	66,000	66,000	14,256	13,780	16,293	15,462	15,540	16,809	12,313	11,014	14,063	16,530	18,408	15,420	13,795

Notes:

Clawback of OAS ($1,595) is included as taxes payable - the clawback only occurs in the Canadian eligible dividends case
BC includes MSP premiums payable for 2012 based on 2011 income
Ontario - includes Ontario Health Premium
QC includes health contribution, contribution to the health services fund, and prescription drug insurance plan premiums

Although the higher taxable income with Canadian eligible dividends causes a clawback of the OAS and a higher clawback of the age credit, the taxes payable are still significantly lower.

To see the tax results for your own income situation, and how it would change if the type of investment income changes, use our Income Tax Planning Calculators.

See also Tax Comparisons by Province and Territory, which compares different levels of employment income for people who are not seniors.