Individual Marginal Tax Rates for Non-Eligible Dividends—2013

  Notes

• These rates apply to “non-eligible” dividends and take into account all federal and

provincial taxes and surtaxes, but do not include provincial health premiums (see the table 

“Provincial Health Premiums”). The respective basic personal and dividend tax credits are 

also included in the calculations.

• As more than one rate could apply to a particular bracket due to a difference in the federal

and provincial bracket thresholds, the rate indicated in the table is that which applies 

to income in approximately the middle range of the bracket. The table assumes that an 

individual has regular income that places the individual in the middle of the above tax 

brackets before taking the dividend income into account.

For provinces that have a top bracket above the top federal tax bracket, a second rate has 

been included in the table. Individuals taxable on income in excess of $150,000 in Nova 

Scotia, or on income above $509,000 in Ontario should use this higher rate.

• The grossed-up dividend (125% of the cash dividend) is used to determine which marginal

tax bracket will apply. However, when calculating the tax, the marginal rate should be 

applied to the cash dividend.

•

The federal gross-up on non-eligible dividends paid after 2013 will decrease to 18% (from 

25%) and the corresponding dividend tax credit will decrease to 11% (from 13.33%).  

Accordingly, the federal effective tax rate on non-eligible dividends paid after 2013 will 

increase. 

•

In response to the proposed federal change to the gross-up of non-eligible dividends (see 

the note above), Manitoba’s dividend tax credit rate will decrease from 1.75% to 0.83% 

beginning in 2014.  This decrease will effectively result in the same amount of provincial 

tax payable on non-eligible dividend income earned before and after the federal change.

•

P.E.I. increased its dividend tax credit rate on non-eligible dividends to 2.9% (from 1%) of 

the taxable amount of the dividend effective January 1, 2013.

• Significant dividend income in addition to the income in the middle range of the bracket

may attract tax at a rate higher than what is shown. Therefore, for purposes of estimating 

taxes applicable to this income, the rate in the next bracket should be used in order to be 

conservative.

$11,039

to $43,561

$43,562

to $87,123

$87,124

to $135,054

$135,055

and over

British Columbia

8.16%

16.21%

29.96%

33.71%

Alberta 

10.21

18.96

23.96

27.71

Saskatchewan 

10.83

22.08

27.08

33.33

Manitoba 

13.40

24.58

35.40

39.15

Ontario

2.77

16.65

28.82

32.57/36.47

Québec

11.74

24.05

35.41

38.54

New Brunswick

10.95

21.05

27.31

33.06

Nova Scotia 

3.45

22.05

28.08

31.83/36.21

P.E.I.

10.71

28.08

34.81

38.56

Newfoundland and 

Labrador

5.46

20.21

26.21

29.96

/  35

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Current as of September 30, 2013