Investment income tax calculator

How this works

We work out your income tax for the year with the same engine as our income tax & RRSP savings calculator: once with only your other income, then once with the amount added as each type of investment income. The difference is the extra tax. Because it’s your whole tax both times, tax brackets and credits that shrink as income rises are taken into account.

Interest to match is the interest you’d need to earn to keep the same amount after tax.

Why the results differ

• Interest is taxed in full, like a salary. Foreign interest and dividends are taxed the same way: they’re reported in Canadian dollars, and foreign dividends don’t get the dividend tax credit.
• Dividends from taxable Canadian corporations are grossed up, and the tax on them is then reduced by federal and provincial dividend tax credits. Eligible dividends get a bigger gross-up and a bigger federal credit. At lower incomes the credit can be worth more than the tax on the dividend, so it also lowers the tax on your other income (but it can’t take your tax below zero). Rates for each province: dividend tax credits.
• Capital gains: only part of a gain is taxed (50% for 2025), and only in the year you sell, or are considered to have sold, the investment.
• In a TFSA, interest, dividends and capital gains are generally tax-free, even when you take them out. See Your TFSA: how it works.

More in How dividends and capital gains are taxed and How investments are taxed.

What we assume

• You’re single, and you lived in the province or territory you chose on December 31.
• Your other income is employment income or pension income (including RRIF payments). We claim the credits that apply automatically, such as the basic personal amount, the age amount at 65 or older, CPP or QPP and EI on employment income, and the pension income amount on pension income at 65 or older.
• Nothing else is deducted or claimed: no RRSP deduction, donations or medical expenses.
• Dividends are the actual amount received from taxable Canadian corporations, and the capital gain is realized this year with no capital losses to apply.
• If you leave your age blank, age-based amounts are left out.

What’s left out

• Old Age Security recovery tax, which is based on net income. Because of the gross-up, dividends raise your net income by more than the cash you receive.
• Alternative minimum tax.
• Foreign tax credits for tax another country withheld.
• Benefits and credits that shrink as income rises, such as the Canada Groceries and Essentials Benefit (formerly the GST/HST credit) and the Canada child benefit.
• Capital losses, carrying charges and other investment costs.
• In Quebec, the prescription drug insurance premium.

Sources

Every figure comes from our tax data for the year, taken from the CRA (and Revenu Québec for Quebec), the same data as our rates tables.