Dividend and Dividend Yield Calculator

Dividend yield is the dividend per share divided by the share price. It shows what percentage of the amount you invested comes back to you in cash over a year, regardless of what the share price does.

The calculator works out the dividend yield, the annual and monthly income from a given number of shares, and the amount left after tax. It also lets you check how much capital you need for a chosen level of passive income.

A high dividend yield can be a warning sign

The yield also rises when the share price falls. A very high figure often means the market is expecting a dividend cut, not that you have found a bargain. Always check whether the payout is covered by earnings and cash flow.

A payout ratio above one hundred percent of earnings means the company is paying out more than it earns and funding the difference with debt or cash from the balance sheet. That rarely lasts long.

Tax and the dates that are easy to forget

Dividends are taxed almost everywhere, often automatically by the broker. With foreign companies there is withholding tax on top and the difference has to be settled in your annual tax return, with rates depending on the double taxation treaty.

You are entitled to the dividend if you hold the shares on the record date, not on the payment date. The share price usually falls on the ex-dividend date by roughly the amount of the dividend, so simply buying just before the ex-date is not free profit.