Question 1

What is the capital gains inclusion rate in Canada?

Accepted Answer

The capital gains inclusion rate is 50%. Only half of your capital gains are included in taxable income. The proposal to increase this rate was cancelled.

Question 2

What is the difference between eligible and ineligible dividends?

Accepted Answer

Eligible dividends are from public Canadian corporations and receive a 38% gross-up with a higher dividend tax credit. Ineligible dividends are from private corporations (CCPCs) with a 15% gross-up and a lower credit.

Question 3

How does CPP work for self-employed individuals?

Accepted Answer

Self-employed individuals pay both the employee AND employer portions of CPP. The employer half is deductible from taxable income.

Question 4

What is the dividend tax credit?

Accepted Answer

The dividend tax credit (DTC) is a non-refundable credit that reduces tax on Canadian dividends. It partially offsets the corporate tax already paid on distributed profits.

Question 5

Is the Alternative Minimum Tax (AMT) included?

Accepted Answer

No, this calculator does not account for AMT, which may apply if you have significant capital gains or dividends. Consult a tax professional for complex scenarios.

Investment & Multi-Income Tax Calculator