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Dividend Calculator

Project dividend income over time with optional dividend growth, share price growth, tax and reinvestment.

A dividend is a share of profit paid to shareholders, and dividend yield expresses that payment as a percentage of the share price. This dividend calculator starts from that yield and projects what a holding pays out over the years that follow.

Formula: income = shares × dividend per share, compounding when reinvested

Your figures

Total paid per share over a year.

How much the dividend per share rises each year.

Used to value the holding and to price reinvested shares.

Withheld before reinvestment.

Buys more shares at that year's price.

Results

Total dividends over 10 years

US$16,083.96

before tax

First-year income
US$1,000.00
Starting dividend yield
5.00%
Initial investment
US$20,000.00
Final portfolio value
US$48,320.01
Shares after reinvestmentUp from 1,000.
1,632.16
Total return
+141.60%
Yield on original cost, final yearFinal-year dividends measured against what you originally paid.
12.03%

What this means

A US$20,000.00 holding yielding 5.00% produces US$1,000.00 in the first year. Reinvesting each payment raises the share count to 1,632.16, so both the income and the holding compound. Dividends are not guaranteed — companies can cut or suspend them at any time, and this projection assumes the growth rates entered continue unchanged.

  • Dividends are treated as one annual payment at year end. Quarterly payments reinvested through the year compound slightly faster.
  • Tax treatment of dividends varies by jurisdiction and by account type.

Total dividends over 10 years: US$16,083.96

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About the Dividend calculation

As a dividend income calculator it runs the projection over a number of years, with optional growth in the dividend per share, growth in the share price, tax withheld, and reinvestment of the payments into more shares.

Reinvestment is what turns a linear income stream into a compounding one, and it is why a dividend reinvestment calculator gives a different answer from yield multiplied by years. Each payment buys more shares, which pay dividends of their own, so both the income and the holding grow year on year.

Dividend formula

starting yield = annual dividend per share ÷ share price × 100

for each year:
  dividend per share grows by the dividend growth rate
  share price grows by the price growth rate
  gross dividend = shares × dividend per share
  net dividend   = gross dividend × (1 − tax rate)
  if reinvesting: shares += net dividend ÷ that year's share price

yield on cost = final-year gross dividend ÷ initial investment × 100
yield on cost
Current income measured against what you originally paid, rather than the current price.
reinvestment
Using dividends to buy more shares, often automated as a DRIP.

Yield on cost rises over time when the dividend grows, because the numerator increases while the denominator — what you originally paid — stays fixed. A holding bought at a 4% yield with 5% annual dividend growth yields about 6.21% on cost after ten years. That is 1.05 to the ninth power rather than the tenth: the first of the ten payments is the one the yield was bought at, so only nine years of growth sit between it and the last.

Reinvestment compounds the share count. Each year's payment buys shares at that year's price — the price after that year's growth, not the price at the start — and those shares pay dividends in every subsequent year.

Dividends are treated here as a single annual payment at year end. Most companies pay quarterly or semi-annually, and reinvesting those payments through the year compounds slightly faster than this model shows.

Dividend: a worked example

1,000 shares at $20, paying $1.00 per share annually, with 5% dividend growth, 4% price growth and dividends reinvested over ten years.

  1. Initial investment1,000 × 20 = $20,000
  2. Starting yield1.00 ÷ 20 = 5.00%
  3. Year 1 dividend1,000 × 1.00 = $1,000
  4. Year 1 share price20.00 × 1.04 = $20.80
  5. Shares bought in year 11,000 ÷ 20.80 = 48.0769 shares
  6. Year 2 dividend per share1.00 × 1.05 = $1.05
  7. Year 2 dividend1,048.0769 × 1.05 = $1,100.48

Income rises from two directions at once — the dividend per share grows and the share count grows. The calculator compounds both across the full period. Note where the reinvestment happens: the year's price growth is applied before the payment, so the dividend buys shares at $20.80 rather than at the $20.00 the year opened with. Reinvesting at the opening price would buy 50 shares and overstate every figure that follows.

How to use the Dividend calculator

  1. Enter the share price and the number of shares held.
  2. Enter the annual dividend per share. If you know the yield instead, multiply it by the share price and divide by 100.
  3. Set the projection period in whole years.
  4. Add growth rates for the dividend and the share price if you want to model them. Zero holds both flat.
  5. Set a tax rate if dividends are taxed in your account, and choose whether to reinvest.

Limitations of the Dividend calculator

Every calculation makes assumptions. These are the ones that matter here.

  • Dividends are not guaranteed. Companies can cut or suspend them at any time, and often do during downturns.
  • Assumes constant growth rates, which no real company delivers year after year.
  • Treats dividends as a single annual payment. Quarterly payments reinvested through the year compound slightly faster.
  • Tax treatment varies by jurisdiction and account type. A flat rate is a simplification.
  • This is a projection from the values entered, not a forecast of what any holding will pay.

Frequently asked questions about Dividend

What does a DRIP calculator model?

A DRIP is a dividend reinvestment plan, which automatically uses each payment to buy more shares instead of paying cash. Setting reinvestment to 'yes' models the same effect, adding each year's net dividend to the share count at that year's price.

Can this be used as a dividend yield calculator?

Yes. Entering the share price and the annual dividend per share gives the starting yield before any projection runs, which is the single figure a dividend yield calculator reports on its own.

What is yield on cost?

Current dividend income measured against what you originally paid, rather than against the current share price. It rises over time when dividends grow, which is why long-held positions can show yields well above the market's current yield.

Is a high dividend yield a good sign?

Not on its own, and this calculator does not assess it. An unusually high yield often reflects a falling share price rather than a rising dividend, and can precede a cut. The yield is one figure among many.

Why does the projection assume the dividend keeps growing?

Because you set the growth rate. Entering 0% holds the dividend flat, which is the more conservative assumption. No growth rate is guaranteed by any company.

How is tax handled?

As a flat percentage withheld before reinvestment. Real dividend taxation depends on your jurisdiction, income, allowances and account type — tax-sheltered accounts may pay nothing at all.

Last reviewed . See our methodology and editorial policy.

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