What a dividend actually costs you.
Eligible dividends are grossed up 38% and credited back. The rate below already contains both, so it applies to what you received — not to the inflated figure on your return.
What this does and does not do
It applies the marginal rate of the bracket your stated income falls in. It is not a tax return: it ignores the basic personal amount and every other credit, and assumes the amount stays inside one bracket. At low incomes those omissions matter a great deal, because credits do.
Why the reported figure is larger
An eligible dividend is grossed up 38% before it appears on your return; a non-eligible one by 15%. The dividend tax credit then offsets the tax. What the credit does not do is reduce the income figure — and net income is what the OAS recovery tax and every income-tested benefit is measured against. Why that catches retirees.
Where the rates come from
The 2026 combined federal and provincial table, transcribed 2026-08-06 from a published rate table. The underlying brackets and credit rates are set federally and provincially ( official figures). Also available as JSON.