2022 Seniors Tax Comparison: Canadian Dividends vs Other Investment Income

The table on this page compares taxes payable by province in 2022 for two different types of income:

	Canadian eligible dividends, and
	other income, such as interest and foreign dividends.

To the above income we add:

	$7,900 of OAS - this is the approximate maximum for 2022, based on Jan - Sep 2022 rates
	$8,731 of CPP retirement income - average for new beneficiaries Apr 2022
	$24,000 of pension income that is eligible for the pension income tax credit

The calculations assume that the income is received by a single senior. The tax rates used are as known on September 18, 2022, including Alberta 2022 indexation.

Notes:

	The clawback of OAS reduces taxable income, and is included in taxes payable.
	Ontario - includes Ontario Health Premium.
	QC includes health contribution, contribution to the health services fund, and prescription drug insurance plan premiums.

Income Type	Annual Amount
OAS	$7,900
CPP	8,731
Eligible Pension Income	24,000
Total before investment income	40,631

Comparison 1: $30,000 of Eligible Dividends or Other Income

Revised to reflect indexation of Alberta's personal income tax system for 2022.

The first comparison uses $30,000 of eligible dividends compared to $30,000 of other income.

Income Type	Annual Income
Income Type	Case A Dividends	Case B Interest
OAS/CPP and Pension Income	40,631	40,631
Eligible Dividends	30,000	nil
Other Income	nil	30,000
Total Income	70,631	70,631
Gross-up	11,400	nil
OAS Clawback	-41	nil
Taxable Income	81,990	70,631

The following table compares the taxes payable on the above incomes - the taxes payable include any applicable OAS clawback.

Province/ Territory	2022 Taxes Payable		Case B Increase in Taxes	Increase as % of A
Province/ Territory	Case A Dividends	Case B Interest	Case B Increase in Taxes	Increase as % of A
AB	7,878	13,588	5,710	72%
BC	5,174	12,440	7,265	140%
MB	10,794	15,899	5,105	47%
NB	7,900	15,551	7,651	97%
NL	11,292	15,729	4,437	39%
NS	11,489	16,819	5,329	46%
NT	4,237	11,514	7,277	172%
NU	4,764	9,863	5,099	107%
ON	6,750	13,248	6,498	96%
PE	10,184	16,228	6,043	59%
QC	12,075	17,637	5,562	46%
SK	7,944	14,659	6,715	85%
YT	5,174	12,561	7,386	143%

You can see above that in BC and the territories, more than double the income tax is payable with interest or other income instead of eligible dividends.

Comparison 2: $50,000 of Eligible Dividends or Other Income

Revised to reflect indexation of Alberta's personal income tax system for 2022.

The next comparison uses $50,000 of eligible dividends compared to $50,000 of other income.

Income Type	Annual Income
Income Type	Case C Dividends	Case D Interest
OAS/CPP and Pension Income	40,631	40,631
Eligible Dividends	50,000	nil
Other Income	nil	50,000
Total Income	90,631	90,631
Gross-up	19,000	nil
OAS Clawback	-4,181	-1,331
Taxable Income	105,450	89,300

The following table compares the taxes payable on the above incomes - the taxes payable include any applicable OAS clawback.

Province/ Territory	Taxes Payable		Case D Increase in Taxes	Increase as % of C
Province/ Territory	Case C Dividends	Case D Interest	Case D Increase in Taxes	Increase as % of C
AB	13,301	21,142	7,841	59%
BC	10,492	19,551	9,058	86%
MB	17,986	24,549	6,563	36%
NB	13,098	23,951	10,853	83%
NL	18,578	24,227	5,648	30%
NS	18,378	25,543	7,165	39%
NT	9,550	18,863	9,313	98%
NU	10,540	16,772	6,232	59%
ON	12,548	20,859	8,311	66%
PE	16,522	24,923	8,401	51%
QC	19,375	26,452	7,077	37%
SK	13,158	22,583	9,424	72%
YT	10,492	19,998	9,505	91%

Although the higher taxable income with Canadian eligible dividends causes a clawback of the OAS and a higher clawback of the age credit, the taxes payable are still significantly lower.

Check Your Own Situation

To see the tax results for your own income situation, and how it would change if the type of investment income changes, use our Detailed Income Tax and RRSP Savings Calculators, and our very simple Investment Income Tax Calculator.

Other Tax Comparisons

See also Tax Comparisons by Province and Territory, which compare different levels of employment income for people who are not seniors.

Tax Tip: Although Canadian dividends increase the OAS clawback, the net tax payable is still much less than with interest or foreign dividends.

Revised: September 20, 2024