Tax by Income Type

What the calculator estimates

This calculator compares the estimated income-tax effect of the same actual additional amount when it is treated as ordinary income, a capital gain, an eligible dividend or an other-than-eligible dividend. Each treatment starts from the same taxable income and is calculated separately.

What the estimate covers

The comparison covers estimated federal and provincial or territorial income tax for the selected jurisdiction using 2026 tax data. The additional amount is the same actual amount in all four rows, but the taxable amount can differ because each income type receives its applicable tax treatment.

Calculation method

The calculator first estimates income tax using the starting taxable income and selected province or territory. It then recalculates the tax four times, adding the same actual additional amount under each income type.

Ordinary income is fully included in taxable income. For a capital gain, the applicable inclusion treatment determines the taxable amount. For Canadian dividends, the applicable gross-up and dividend tax-credit treatment is applied.

For each row, the estimated tax change is the difference between the before-and-after tax calculations. The displayed percentage is that tax change divided by the actual additional amount, not by the taxable amount added.

Understanding the result

The table shows the taxable amount added, estimated income-tax change, amount after estimated income tax and tax change as a percentage of the actual additional amount for each treatment.

The four rows are independent comparisons; they are not added together. A larger additional amount can cross tax brackets or other thresholds, so the tax-change percentage shown for that amount is not necessarily the same as the marginal rate on the next dollar.