Seniors Tax Comparison of Canadian Dividends vs Other Investment Income 2013

The table on this page compares taxes payable by province in 2013 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 at Dec 31, 2013.

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 2013
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	$76,433	$8,081	$7,523	$11,673	$9,232	$9,197	$11,861	$5,531	$6,399	$9,388	$10,902	$13,098	$9,076	$6,473
B. Other Income	66,000	66,000	13,852	13,545	15,937	15,517	15,097	16,507	11,892	10,604	13,654	16,228	18,050	14,995	13,365

Notes:

The $967 Clawback of OAS in Case A is included as taxes payable, and reduces taxable income
BC includes MSP premiums payable for 2014 based on 2013 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 compare different levels of employment income for people who are not seniors.