Dividend Calculator
DRIP, Dividend Income and 2026 Tax
Project how your dividend portfolio and income grow with reinvestment (DRIP), see the tax on your dividends, and find out how much you need invested for the monthly income you want.
Read the full answer — method, rates and figures
Quick answer: A dividend calculator projects how a dividend portfolio grows when payouts are reinvested (DRIP). For example, $10,000 plus $500 a month in a stock yielding 3.5%, with dividends growing 6% and the price 4% a year, reinvested for 20 years, grows to about $356,211 and pays about $16,595 a year in dividends by year 20 ($1,383 a month).
To live on $1,000 a month of dividends at a 4% yield you need about $300,000 invested. In a taxable account, qualified dividends are taxed at 0%, 15% or 20% like long-term capital gains, plus the 3.8% Net Investment Income Tax at higher incomes; non-qualified dividends are taxed as ordinary income.
How much will my dividends grow with DRIP?
$10,000 plus $500 a month at a 3.5% yield, with 6% dividend growth and 4% price growth, reinvested for 20 years: about $356,211, paying $16,595 a year ($1,383 a month). Enter your own numbers below.
Portfolio in 20 years
$356,211
Dividends in year 20
$16,595/yr
Yield on cost
12.8%
Total dividend tax
$18,075
Reinvest or take the cash?
- • You put in $130,000 over 20 years; the portfolio paid $120,499 in dividends in total.
- • With DRIP: portfolio $356,211, paying $16,595 a year ($1,383 a month) by year 20.
- • Taking cash: portfolio $204,428 plus $83,967 of dividends received along the way, paying $9,770 a year by year 20.
- • Tax on dividends: $2,489 in year 20, $18,075 over the whole period (qualified rates, 2026 brackets held flat).
Year by year
| Year | Portfolio | Dividends | Tax |
|---|---|---|---|
| 1 | $17,021 | $485 | $73 |
| 5 | $51,139 | $1,734 | $260 |
| 10 | $112,544 | $4,295 | $644 |
| 15 | $206,919 | $8,747 | $1,312 |
| 20 | $356,211 | $16,595 | $2,489 |
How much do you need for a monthly dividend income?
At your 3.5% yield: $342,857 invested. At 3%: $400,000 · at 4%: $300,000 · at 5%: $240,000. Before tax.
Selling shares as well? The capital gains tax calculator shows the 0%, 15% and 20% bands your dividends share with any gains.
See the long-run effect of reinvesting with the compound interest calculator, or check the 3.8% tax on all your investment income with the NIIT calculator.
Last reviewed 22 September 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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The calculator buys shares with your starting amount and each monthly contribution, grows the share price every month at your price-growth rate, and pays the dividend quarterly. The dividend per share starts at your yield on today's price and rises once a year at your dividend-growth rate. With DRIP on, each quarterly dividend buys more shares at that day's price, which then earn dividends of their own.
In a taxable account, each year's dividends are taxed with the 2026 federal rules: qualified dividends at 0%, 15% or 20% depending on where they fall on top of your other income, non-qualified dividends at ordinary rates, and the 3.8% Net Investment Income Tax above the threshold. Tax brackets are held at 2026 levels for future years, and the tax is treated as paid from other cash so reinvestment is not reduced. Returns are not guaranteed: dividends can be cut, and prices fall as well as rise.
Sources: IRC §1(h)(11) (qualified dividends taxed at capital gains rates); IRS Rev. Proc. 2025-32 §4.03 (2026 rate limits); IRC §1411 (Net Investment Income Tax).
How to use this calculator
- Enter your starting investment and how much you will add each month.
- Enter the dividend yield, how fast you expect the dividend to grow, and how fast you expect the share price to grow.
- Choose the number of years and whether dividends are reinvested (DRIP).
- For a taxable account, pick your filing status, other income and whether the dividends are qualified, to see the yearly tax.
- Read the final value, your dividend income, yield on cost and total tax, and use the income target to see what you need invested for a monthly income.
❓ Frequently Asked Questions
How much do I need to invest to earn $1,000 a month in dividends?
$400,000 at a 3% yield, $300,000 at 4% and $240,000 at 5%: annual income ÷ yield. Higher yields need less capital but often come with slower dividend growth or more risk of a cut.
Use the income target section of the calculator for any amount.
What is DRIP?
A dividend reinvestment plan automatically uses each dividend to buy more shares, often fractional shares with no commission. The new shares earn dividends too, so income compounds.
In a taxable account reinvested dividends are still taxed in the year they are paid, even though you never receive the cash.
How are dividends taxed in 2026?
Qualified dividends (from US companies and qualified foreign companies, on shares held more than 60 days in the 121-day period around the ex-dividend date) are taxed like long-term capital gains: 0% up to $49,450 of taxable income for a single filer ($98,900 joint), 15% up to $545,500 ($613,700 joint) and 20% above. Non-qualified dividends, such as ordinary REIT dividends and money-market fund distributions, are taxed at ordinary rates.
The 3.8% Net Investment Income Tax applies above $200,000 of modified AGI ($250,000 joint).
What is yield on cost?
Your current annual dividends divided by the total amount you have invested. If a company keeps raising its dividend, yield on cost rises over time even though the stock's quoted yield may not change.
The calculator shows yours in the final year.
Should I reinvest dividends or take the cash?
Reinvesting grows both the portfolio and future income faster; taking cash gives you income now. A common approach is to reinvest while working and switch DRIP off in retirement.
The calculator compares both for the same inputs.
Do dividends in an IRA or 401(k) get taxed?
Not when they are paid. In a traditional IRA or 401(k) they grow tax-deferred and withdrawals are taxed as ordinary income; in a Roth account qualified withdrawals are tax-free.
Switch the account to tax-advantaged to see the projection without annual tax.
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Further Reading
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