Dividend income and yield on cost calculator

How much does a dividend position actually pay you after tax, and what is it yielding on the money you put in? The calculator above answers both for a single holding. You enter four numbers; it returns your net income per year and per month and your yield on cost.

How to use the calculator

The inputs:

• Number of shares you own.
• Yearly dividend per share, in USD — the sum of the last 12 months of payments. A stock paying $0.80 a quarter pays $3.20 a year.
• Purchase price per share, in USD — your average cost, not today's price.
• Dividend tax rate, in percent — your rate, which you type yourself (see below).

The results:

• Net income per year — gross dividends minus tax.
• Net per month (average) — the yearly net divided by 12. Most US stocks pay quarterly, so real cash arrives in lumps.
• Gross dividends per year and the tax amount.
• Yield on cost — yearly gross dividend per share divided by your purchase price.
• Position value at cost — shares × purchase price.

The formulas

• Gross dividends = shares × yearly dividend per share
• Tax = gross dividends × tax rate
• Net income = gross dividends − tax
• Yield on cost = yearly dividend per share ÷ purchase price

Yield on cost uses the gross dividend, so it compares with the yields quoted by brokers and data sites. It is different from the current yield, which divides the dividend by today's share price.

Which tax rate should you enter?

That depends on the type of dividend and your income, which is why the calculator leaves the rate to you.

• Qualified dividends are taxed at the long-term capital gains rates: 0%, 15% or 20%, depending on your taxable income and filing status. Most dividends from US companies, and from many foreign companies, qualify — provided you meet the holding period (more than 60 days during the 121-day window that begins 60 days before the ex-dividend date).
• Ordinary (non-qualified) dividends are taxed at your ordinary income tax rate, from 10% up to 37%. REIT distributions, money market fund dividends and dividends that fail the holding period usually fall here.
• Net investment income tax: higher earners may owe an extra 3.8% on investment income, including dividends.
• State tax: most states tax dividends as ordinary income; add your state rate if you want an all-in figure.

The income thresholds for each rate change every year with inflation; the IRS publishes them in its annual inflation adjustments. Your Form 1099-DIV shows total ordinary dividends in box 1a and the qualified part in box 1b. For a fuller explanation, see our article on qualified vs ordinary dividends.

If the shares sit inside a Roth IRA, traditional IRA or 401(k), dividends are not taxed when paid — enter 0%.

Worked example

You own 250 shares bought at $60. The company pays $0.60 a quarter, so $2.40 a year. Your dividends are qualified and you are in the 15% bracket.

	Amount
Gross dividends per year	250 × $2.40 = $600.00
Tax at 15%	$90.00
Net income per year	$510.00
Net per month (average)	$42.50
Position value at cost	250 × $60 = $15,000
Yield on cost	$2.40 ÷ $60 = 4.00%

Now suppose the share price has since risen to $80 while the dividend stayed at $2.40. The current yield is 3.00%, but your yield on cost is still 4.00% — because you bought cheaper. If the company raises the dividend to $3.00, your yield on cost rises to 5.00% without you buying a single share.

Pitfalls

• Yield on cost flatters old positions. It says nothing about whether the capital would earn more elsewhere today. Use current yield to compare investments.
• Dividends are not guaranteed. Companies cut, raise or suspend them; the calculator assumes the last 12 months repeat.
• Special dividends distort the 12-month sum. Leave one-off payments out of the dividend per share.
• Foreign withholding. Dividends from non-US companies may arrive with foreign tax already withheld; that is separate from your US rate, though you can often claim a foreign tax credit.
• Reinvested dividends are still taxable. DRIP purchases change your average cost — update the purchase price accordingly.

Track real dividends, not estimates

GetHossa's dividend tracker records every dividend you actually receive, as your broker booked it, across all your brokerages, and forecasts the next 12 months of payments from your current holdings. The forecast is gross, before any tax, because your rate depends on your own situation — this calculator is where you apply it. Sign up free to see your dividend income month by month.

This calculator is for education only and is not tax or investment advice. Tax rates depend on your full tax situation; check IRS guidance or ask a tax professional.