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## What is the dividend gross-up for 2021?

Currently, the gross-up rate is **38% for the eligible dividends** and 15% for the other than eligible dividends.

## How much tax do I pay on non-eligible dividends?

Non-eligible dividends, generally paid from income subject to lower small business and passive income tax rates, are taxed in the hands of the shareholder ranging **from 35.98%-47.34%** (depending on Province/Territory). RDTOH, a notional tax account balance, is refunded to the corporation when a taxable dividend is paid.

## What is dividend gross-up?

The dividend gross-up **functions by approximating the amount of income a corporation would have had to have earned in order to issue a particular dividend**. For example, if an individual receives a dividend of $100 from a non-CCPC – that $100 would have already been subjected to the basic federal corporate tax of 38%.

## What is an eligible dividend and non-eligible dividend?

Eligible dividends are “grossed-up” to reflect corporate income earned, and then a dividend tax credit is included to reflect the higher rate of corporate taxes paid. Non-eligible dividends. Non-eligible dividends are **received from small business corporations that earn under $500,000 of net income** (most companies).

## How do you calculate gross-up?

**To calculate tax gross-up, follow these four steps:**

- Add up all federal, state, and local tax rates.
- Subtract the total tax rates from the number 1. 1 – tax = net percent.
- Divide the net payment by the net percent. net payment / net percent = gross payment.
- Check your answer by calculating gross payment to net payment.

## How are taxable eligible dividends calculated?

Calculate the taxable amount of eligible dividends by **multiplying the actual amount of eligible dividends you received by 145%** . For dividends other than eligible dividends, calculate the taxable amount by multiplying the actual amount of dividends (other than eligible) you received by 125% .

## How do you calculate gross-up dividends?

In general terms, for any other percentage of the dividend that is franked: **(Dividend yield x unfranked percentage) + (Dividend yield x franked percentage /0.7) = Grossed up** dividend yield.

## How do you calculate dividend income?

To calculate dividend yield, all you have to do is **divide the annual dividends paid per share by the price per share**. For example, if a company paid out $5 in dividends per share and its shares currently cost $150, its dividend yield would be 3.33%.

## What are eligible dividends and ineligible dividends in Canada?

**Corporate income that has been taxed at the higher rate** can be paid as an eligible dividend, whereas, income that has been taxed at the lower rate small business deduction rate will be paid as an ineligible dividend.