Dividend Income Calculator
Dividend income is the easiest investment return to picture, because it arrives as cash on a date you can see. That makes it the easiest to over-count as well.
Dividend yield
6.20%
- Income in year one
- $1,240.00
- Income in the final year
- $1,923.65
- Total income over the horizon
- $15,596.59
- Total after tax
- $13,257.10
- Average per month
- $129.97
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
annual income = shares x dividend per share; yield = dividend per share / price
- N
- Number of shares held
- DPS
- Annual dividend per share
- y
- Dividend yield, dividend per share divided by price
- g
- Assumed annual growth in the dividend per share
How to check the result by hand
- 1
Divide the dividend by the price
A £6.20 dividend on a £100 share is a 6.2% yield. The same dividend on a £155 share is a 4% yield, because the yield measures income against what was paid.
- 2
Multiply by the number of shares
Shares times dividend per share gives the cash in year one. This figure is independent of the share price and only moves when the count or the dividend changes.
- 3
Grow the dividend for the horizon
Raise one plus the growth rate to the number of years minus one and multiply. With 5% growth the tenth year is about 55% larger than the first.
- 4
Sum the growing stream
Use the growing-annuity formula to add up every year from the first to the last. This total is much larger than ten times the first year once the growth rate is meaningful.
- 5
Apply the tax rate
Multiplying by one minus the tax rate gives the amount kept. Do this last, because the tax applies to every year's payment including the larger later ones.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Dividend Income page.