Dividend calculator: estimate dividend income, ending balance and yield on money put in

Annual dividend income is the shares you hold times the annual dividend per share. Enter a starting investment, a dividend yield, how fast the dividend and the share price are assumed to grow, a payout schedule and whether dividends are reinvested, and the calculator shows dividend income, the ending balance and yield on money put in for each year if those assumptions hold. Nothing is looked up: no ticker, quote or forecast is used, and every figure is an estimate from your inputs.

Dividend calculator

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Dividend income in year 1
$303.34
Annual dividend income in year 20
$1,406.32
Ending balance, if the assumptions hold
$41,539.01
Yield on money put in (final year)
14.06%
Shares at the end
379.157
Money you put in
$10,000.00
Cash dividends kept
$0.00
Tax on dividends
Not applied

Assumptions behind these results

  • Every input is your assumption. The result applies them year by year and is not a forecast of any investment.
  • The first-year dividend per share is the starting share price times the yield; it then grows by the dividend growth each year. The share price grows by the price growth each year.
  • Dividends are paid in equal parts at the end of each payout period on the shares held then. A reinvested dividend buys fractional shares at that day’s assumed price.
  • Additions buy shares at the assumed price at the start of each month or year, starting with the first.
  • The dividend per share does not follow the share price: it changes only by the dividend growth you enter, so a falling or rising price changes the yield on the day but not the dividend.
  • No fees, no commissions and no interest on cash dividends. Price growth is the only change in value besides dividends.
  • If you turn the tax on with DRIP on, the tax is taken out of each dividend before it buys shares. A DRIP uses the dividend itself to buy shares, and Publication 550 says reinvested dividends must still be reported as income, so in this model the tax reduces what is reinvested.
  • Tax is not applied unless you turn it on above.
Year by year, from the inputs above
YearDividend per shareDividends receivedTaxReinvestedAdditionsShares at year endShare priceBalance
1$1.50$303$0$303$0205.92$52.00$10,708
2$1.58$328$0$328$0212.074$54.08$11,469
3$1.65$355$0$355$0218.473$56.24$12,288
4$1.74$384$0$384$0225.13$58.49$13,169
5$1.82$415$0$415$0232.057$60.83$14,117
6$1.91$449$0$449$0239.266$63.27$15,137
7$2.01$487$0$487$0246.771$65.80$16,237
8$2.11$527$0$527$0254.587$68.43$17,421
9$2.22$571$0$571$0262.729$71.17$18,697
10$2.33$619$0$619$0271.213$74.01$20,073
11$2.44$671$0$671$0280.056$76.97$21,557
12$2.57$727$0$727$0289.277$80.05$23,157
13$2.69$789$0$789$0298.894$83.25$24,884
14$2.83$856$0$856$0308.927$86.58$26,748
15$2.97$929$0$929$0319.398$90.05$28,761
16$3.12$1,009$0$1,009$0330.329$93.65$30,935
17$3.27$1,096$0$1,096$0341.745$97.40$33,284
18$3.44$1,190$0$1,190$0353.67$101.29$35,823
19$3.61$1,294$0$1,294$0366.131$105.34$38,569
20$3.79$1,406$0$1,406$0379.157$109.56$41,539

What a dividend is, and how the result is figured

Investor.gov, the SEC's investor education site, defines a dividend in its glossary:

“A portion of a company's profit paid to shareholders. Public companies that pay dividends usually do so on a fixed schedule although they can issue them at any time. Unscheduled dividend payments are known as special dividends or extra dividends.”
Investor.gov (U.S. SEC), Glossary, “Dividend,” Internet Archive capture of August 11, 2026; saved November 6, 2026

IRS Topic no. 404 describes dividends for tax purposes, including a limit on what counts:

“Dividends are distributions of earnings and profits paid by a corporation to stockholders. While most dividends are paid in cash, you may also be issued stock, stock rights, and other property or services. However, if you receive distributions such as additional stock or stock rights for services you performed, such distributions may not be paid from earnings and profits and may not qualify as dividends.”
IRS, Topic no. 404, Dividends (page last reviewed or updated 08-Oct-2026); saved November 6, 2026

The calculator's arithmetic, which is FedRateCalc's own and not a formula printed by either source, runs in these steps for every payout:

  1. Annual dividend per share in year 1 is the starting price times the yield. Each later year it is the year before times one plus the dividend growth.
  2. A payout is the shares held then times the annual dividend per share, divided by the payouts per year.
  3. The share price in any month is the starting price times one plus the price growth, raised to the number of years elapsed.
  4. With DRIP on, the payout (after any tax you enter) buys fractional shares at that month's price; with DRIP off it is kept as cash that earns nothing.
  5. Yield on money put in (final year) is the final year's dividends divided by the money you put in yourself: the starting investment plus additions, without reinvested dividends. It is not the “yield on cost” of the dividend yield calculator, which divides one year's annual dividend per share by the price paid per share.

Tax on qualified dividends (2026 thresholds)

IRS Topic no. 404 separates ordinary and qualified dividends:

“Qualified Dividends: Dividends can be classified either as ordinary or qualified. While all taxable dividends are considered ordinary income, qualified dividends are those ordinary dividends that qualify to be taxed at lower capital gain rates. The payer of the dividend is required to correctly identify which of your ordinary dividends are also qualified dividends when reporting them on your Form 1099-DIV, Dividends and Distributions.”
IRS, Topic no. 404, Dividends (page last reviewed or updated 08-Oct-2026); saved November 6, 2026

The optional tax setting treats every dividend as qualified and applies the Qualified Dividends and Capital Gain Tax Worksheet that FedRateCalc uses for its capital gains tax brackets page and its capital gains tax calculator. The 2026 amounts it reads, from Rev. Proc. 2025-32, section 4.03, are in this table; the same amounts are used for every year of the projection, and the worksheet never taxes a dividend above your ordinary rate.

2026 maximum zero rate and maximum 15 percent rate amounts by filing status
Filing status (2026)0% rate up to taxable income of15% rate up to taxable income of20% rate above
SingleRev. Proc. row: All Other Individuals$49,450$545,500$545,500
Married filing jointly (or qualifying surviving spouse)Rev. Proc. row: Married Individuals Filing Joint Returns and Surviving Spouse$98,900$613,700$613,700
Married filing separatelyRev. Proc. row: Married Individuals Filing Separate Returns$49,450$306,850$306,850
Head of householdRev. Proc. row: Heads of Household$66,200$579,600$579,600

Topic no. 404 also points to a separate tax and a payment rule that the calculator does not apply:

“If you receive dividends in significant amounts, you may be subject to the net investment income tax (NIIT) and may have to pay estimated tax to avoid a penalty.”
IRS, Topic no. 404, Dividends (page last reviewed or updated 08-Oct-2026); saved November 6, 2026

FedRateCalc's net investment income tax page covers that tax.

What the calculator leaves out

  • Fees, commissions, state tax, tax on selling shares and interest on cash dividends.
  • Dividend cuts or suspensions, special dividends and any change in a company's payout, unless you put them in the growth rates yourself.
  • Funds and REITs, whose distributions can include capital gain distributions that Topic no. 404 treats separately.

To compare reinvesting with taking cash, use the DRIP calculator; to turn a price and a dividend into a yield, use the dividend yield calculator.

Frequently asked questions

What counts as a dividend?

The Investor.gov glossary defines a dividend as a portion of a company's profit paid to shareholders, and says companies that pay dividends usually do so on a fixed schedule but can issue them at any time. IRS Topic no. 404 adds that most dividends are paid in cash but may also be issued as stock, stock rights or other property, and that some distributions received for services may not qualify as dividends.

How does the calculator work out dividend income?

FedRateCalc multiplies the shares you hold by the annual dividend per share and pays it in equal parts on your payout schedule. The first-year annual dividend per share is the starting share price times the yield you enter, and it changes each year by the dividend growth you enter. Share price changes by the price growth you enter. Every figure is your assumption, so the result is an estimate, not a forecast.

Are dividends taxed?

IRS Topic no. 404 says all taxable dividends are ordinary income, and qualified dividends are the ordinary dividends that qualify to be taxed at lower capital gain rates. The optional tax setting uses the 2026 qualified dividend thresholds from FedRateCalc's capital gains tax module (for example $49,450 for the 0% rate for a single filer) and treats every dividend as qualified, which the payer's Form 1099-DIV may not show.

What is the “Yield on money put in (final year)” figure in this calculator?

In FedRateCalc it is the gross dividends received in the final year divided by the money you put in yourself, the starting investment plus any additions, as a percentage. Reinvested dividends are not counted as money you put in. It is not the “yield on cost” of the dividend yield calculator, which divides one year's annual dividend per share by the price paid per share. When FedRateCalc checked the Investor.gov glossary entry for Dividend, the Investor.gov glossary entry for Yield and IRS Topic no. 404 on November 6, 2026, none of them used the term yield on cost, so both figures are FedRateCalc's own arithmetic.

What does turning DRIP on or off change?

With DRIP on, FedRateCalc uses each dividend, after any tax you enter, to buy additional fractional shares at the assumed price that day. With DRIP off, it keeps the dividend as cash that earns no interest. The DRIP calculator page shows both runs side by side.

Does the dividend calculator include the net investment income tax?

No. IRS Topic no. 404 says that if you receive dividends in significant amounts, you may be subject to the net investment income tax (NIIT) and may have to pay estimated tax to avoid a penalty. FedRateCalc's dividend calculator does not apply either one.

Related pages

Sources

Reviewed November 6, 2026. FedRateCalc is not affiliated with the IRS or the SEC; their sites are the official source, and this page is general information, not tax or investment advice.