Dividend education for Canada and the US · no stock picks · rules checked October 31, 2026Part of the MITEY network
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Calculator · Canada & US

DRIP calculator: what reinvesting dividends could compound to

Model dividend reinvestment (DRIP) against taking the cash: yearly contributions, dividend growth, price growth, tax drag and whole-share rules, year by year.

A DRIP is a snowball. It needs time and a dividend that keeps getting paid. The model assumes both, so stress-test it.
Mitey the yeti with savings growing

Assumptions

0% for Canadian shares in a TFSA/RRSP; 15% for US shares in a TFSA.

After 20 years

Value with DRIP
$150,966
Value taking cash
$121,271
DRIP difference
$29,695
Yearly dividends (DRIP)
$6,773
Yearly dividends (cash)
$3,815
Contributions
$58,000
Portfolio value with and without dividend reinvestmentAfter 20 years the DRIP path reaches $150,966 versus $121,271 taking dividends as cash.$0$50k$100k$150k$200kY0Y3Y6Y9Y12Y15Y18Y20
  • Reinvesting (DRIP)
  • Taking cash (cash kept, uninvested)
  • Money you put in
Year by year with DRIP
YearSharesDividends that yearValue
2390.7$576$16,578
4536.6$883$24,159
6689.2$1,248$32,918
8849.9$1,682$43,065
101,020.3$2,200$54,848
121,202.2$2,819$68,563
141,397.7$3,557$84,564
161,609.0$4,442$103,276
181,838.6$5,501$125,206
202,089.7$6,773$150,966

Estimate for education, not advice. This site does not recommend, rate or rank any security and does not know your full situation. Results depend on your inputs and the simplifications listed under Method. Check tax details with the CRA or IRS, or a qualified professional. Read the disclaimer.

How to use it

  1. Enter your starting amount, price per share, starting yield and yearly contributions.
  2. Set dividend growth and price growth. Try 0% for both to isolate the reinvestment effect.
  3. Add tax drag if dividends are taxed or withheld before reinvesting (for example 15% for US dividends in a TFSA).
  4. Tick 'whole shares only' if your plan cannot buy fractions; leftover cash waits for the next payment.

Method and limits

  • Each payment: dividend = shares × annual dividend per share ÷ payments per year. The dividend per share grows once a year by the dividend growth rate.
  • With DRIP, the net dividend plus that period's contribution buys shares at the current modelled price; without DRIP, dividends pile up as cash (no interest) and only contributions buy shares.
  • Price grows smoothly at the price growth rate. Real prices jump around, and real dividends can be cut, so treat the result as a what-if, not a forecast.

Frequently asked questions

Do I pay tax on reinvested dividends?
In a taxable account, yes: Canada and the US both tax reinvested dividends in the year they are paid. In Canada each reinvestment raises your adjusted cost base, so keep records. In a TFSA, RRSP or IRA there is no current tax on Canadian or domestic dividends.
Why does the DRIP line beat the cash line even with 0% price growth?
Reinvested dividends buy more shares, and those shares earn dividends too. Without reinvestment the cash sits idle in this model. In reality you might invest the cash elsewhere, which narrows the gap.
What is a synthetic DRIP?
A brokerage-run reinvestment that buys whole shares with your dividends, usually without commission. Company-run plans can sometimes buy fractions or offer a small discount. Terms vary by plan, so read the plan document.

Primary sources

Rules checked October 31, 2026. Tax rules and rates change; confirm current details on the official pages above.