Seniors Tax Comparison: Canadian Dividends vs Other Investment Income 2014

The table on this page compares taxes payable by province in 2014 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 August 19, 2014.

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, or
3. $50,000 of Canadian eligible dividends, or
4. $50,000 of other income

Income Type	Total Income	Taxable Income	Total Federal + Provincial Income Taxes Payable in 2014
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	$76,529	$7,939	$7,453	$11,531	$9,682	$10,195	$11,746	$5,400	$6,254	$7,848	$10,787	$13,572	$8,933	$6,342
B. Other Income	66,000	66,000	13,761	13,539	15,852	15,883	14,998	16,449	11,811	10,525	13,569	16,169	18,300	14,910	13,281
Additional Tax (B-A)			$5,822	$6,086	$4,321	$6,201	$4,803	$4,703	$6,411	$4,271	$5,721	$5,382	$4,728	$5,977	$6,939
C. Cdn Eligible Dividends	86,000	99,989	13,264	13,139	19,145	15,949	16,792	19,011	11,139	12,569	14,527	17,546	20,728	14,686	12,081
D. Other Income	86,000	83,839	22,027	21,577	25,332	25,039	23,779	25,845	20,038	18,304	22,093	25,571	27,496	23,654	21,590
Additional Tax (D-C)			$8,763	$8,438	$6,187	$9,090	$6,987	$6,834	$8,899	$5,735	$7,566	$8,025	$6,768	$8,968	$9,509

Notes:

The clawback of OAS in Cases A ($871), C ($5,011) and D ($2,161) reduces taxable income, and is included as taxes payable.
BC includes MSP premiums payable for 2015 based on 2014 income.
NL dividends are assumed to be received evenly throughout the year, so the taxes are lower than they will be in 2015.
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 Detailed Income Tax and RRSP Savings Calculators, and our very simple Investment Income Tax Calculator.

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