Rates and deadlines
Dividend Gross Up and Tax Credit Rates for 2026
38%gross up on eligible dividends, with a federal credit of 15.02% of the grossed up amount. Other dividends: 15% and 9.03%.
Sources checked October 20263 min read
How the gross up and credit work
A dividend is paid from profit the corporation has already been taxed on. To stop that profit being taxed in full a second time, the shareholder adds a gross up to the dividend, roughly rebuilding the pre tax profit, and then claims a credit for the corporate tax already paid.
Which rate applies depends on the corporate tax behind the dividend. Eligible dividends are generally paid out of income taxed at the general corporate rate and designated by the corporation; dividends out of income taxed at the small business rate are other than eligible.
| Eligible | Other than eligible | |
|---|---|---|
| Gross up | 38% | 15% |
| Federal credit, share of the grossed up dividend | 15.02% | 9.03% |
| Federal credit, share of the gross up | 6/11 | 9/13 |
Key points
- Eligible dividends: 38% gross up, 15.02% federal credit
- Other than eligible: 15% gross up, 9.03% federal credit
- The credit percentages apply to the grossed up amount
- Every province adds its own dividend tax credit
A $10,000 dividend of each kind
A $10,000 eligible dividend is reported as $13,800.00 of income and earns a federal credit of $2,072.73. The same $10,000 as an other than eligible dividend is reported as $11,500 and earns $1,038.46.
The provincial credit comes on top and differs by province, which is why the after tax cost of a dividend is never the same in two provinces.
Quick answers
What is the dividend gross up for 2026?
38% for eligible dividends and 15% for other than eligible dividends.
What is the federal dividend tax credit?
15.02% of the grossed up amount for eligible dividends and 9.03% for other than eligible dividends.
Are dividends from my small business eligible?
Usually not. Profit taxed at the small business rate generally pays out as other than eligible dividends.
Related pages
Official sources
Call or email and we will tell you which records we need and what the work costs, in writing, before anything starts.
Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.