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Eligible Dividend Tax Credit Rates and Amount of Dividends           

that may be Received Without Incurring Tax in 2014

1

Notes

(1) This table assumes only “eligible dividend” income is earned and takes into account all 

federal and provincial taxes, surtaxes, and alternative minimum taxes, but does not include 

provincial premiums (see the table “Provincial Health Premiums“). The respective basic 

personal and dividend tax credits and provincial tax reductions, where applicable, are also 

included.

In general, “eligible dividends” are dividends paid to Canadian residents by public 

companies, and by Canadian-controlled private corporations (CCPCs) out of income taxed 

at the federal general corporate tax rate. CCPCs cannot pay eligible dividends from income 

that has benefited from a special tax rate such as active business income eligible for the 

federal small business deduction or investment income that is subject to refundable tax 

treatment. Public companies and other non-CCPCs can generally pay eligible dividends 

without restriction.

The gross-up rate for eligible dividends is 38%. The actual amount received is therefore 

multiplied by 1.38 to determine the taxable amount of the dividend.

(2) The federal and provincial dividend tax credit (DTC) rates in the table’s first column apply 

to the actual amount of the dividend received by an individual. The DTC rate can also be 

expressed as a percentage of the taxable dividend, as indicated in the table’s second 

column.

(3) Ontario’s DTC rate on eligible dividends increased to 10% (from 6.4%) of the taxable 

amount of the dividend effective January 1, 2014.  

(4) Newfoundland and Labrador’s DTC rate on eligible dividends decreased to 5.4% (from 

11.0%) of the taxable amount of the dividend effective July 1, 2014.

Dividend Tax 

Credit Rate

2

Amount of Dividend 

Received Tax Free

Actual

Dividend

Taxable

Dividend

Actual

Dividend

Taxable

Dividend

Federal

20.73%

15.02%

$ 49,284

$ 68,012

British Columbia 

13.80

10.00

49,284

68.012

Alberta

13.80

10.00

49,284

68,012

Saskatchewan

15.18

11.00

49,284

68,012

Manitoba

11.04

8.00

24,271

33,494

Ontario

3

13.80

10.00

49,284

68,012

Quebec

16.42

11.90

35,076

48,405

New Brunswick

16.56

12.00

49,284

68,012

Nova Scotia 

12.21

8.85

30,508

42,101

Prince Edward Island

14.49

10.50

44,674

61,650

Newfoundland and 

Labrador

4

Dividends received 

before July 1, 2014
Dividends received 

after June 30, 2014

15.18

7.45

11.00

5.40

49,284

49,284

68,012

68,012

© 2014 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 December 31, 2014