{"id":951625,"date":"2021-11-11T14:41:07","date_gmt":"2021-11-11T19:41:07","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=951625"},"modified":"2026-03-04T19:33:19","modified_gmt":"2026-03-05T00:33:19","slug":"stock-trading-cra","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/stock-trading\/stock-trading-cra","title":{"rendered":"How are stocks taxed in Canada?"},"content":{"rendered":"

You\u2019ll need to pay taxes when you earn dividends, interest and\/or capital gains from stocks held in taxable (non-registered) accounts. But different types of investment income affect your tax rate, and the taxes on stock gains you\u2019ll pay will depend on what type of investor you are and what income bracket you\u2019re in.<\/p>

Keep reading to find out how stocks are taxed in Canada.<\/p>

Do I have to pay tax on stock gains in Canada?<\/h3>

Yes, you\u2019ll need to pay taxes on stocks in Canada that generate investment income in a non-registered account. But the way stocks are taxed in Canada varies depending on three main factors:<\/p>

  1. Investment income type.<\/strong> You can make investment income in the form of interest, dividends or capital gains. The type of investment income you make can affect how much you have to pay in taxes on stocks in Canada.<\/li>
  2. Investor type.<\/strong> The way your investment income is taxed varies depending on whether you\u2019re a normal investor or a day trader (which means you buy and trade stocks on a daily basis as your primary form of income).<\/li>
  3. Tax bracket.<\/strong> Your tax bracket will also define how much you have to pay in taxes on stock gains. The higher your gross income (minus deductions), the more you\u2019ll have to pay in taxes on stocks in Canada.<\/li><\/ol>

    Do you need to pay day trading taxes in Canada?<\/h3>

    Yes, you\u2019ll need to pay tax on your day trading income in Canada. Unlike regular investors, the income you earn from day trading is fully taxable as business income.<\/p>

    How are stocks taxed in registered accounts?<\/h4>

    You won\u2019t need to pay taxes on investment income you earn in a TFSA<\/a>. Other tax-advantaged registered accounts, such as RESPs<\/a> and RRSPs<\/a>, allow you to defer tax until you make a withdrawal from your account. However, be aware that you might have to pay taxes on your investments if you use these accounts for day trading<\/a> or to generate business income.<\/p><\/div><\/article>

    Factor 1: How stocks are taxed by investment income type<\/h3>

    The taxes on stock gains you need to pay based on investment income type are outlined below:<\/p>
    Income type<\/th>How it works<\/th>Amount taxable<\/th>Example<\/th><\/tr><\/thead>
    Interest<\/td>You\u2019ll earn on investments such as savings accounts, government or corporate bonds, GICs, mutual funds and ETFs.<\/td>Any interest you earn on investments is 100% taxable.<\/td>If you make $1,000 in interest on your investment and your marginal tax rate is 30%, you\u2019ll pay $300 in taxes on the interest you earn.<\/td><\/tr>
    Dividends<\/td>Dividends are a cash payment you receive when a dividend-paying company you invest in makes money. You can earn dividends from stocks, ETFs and mutual funds.<\/td>Dividends may be eligible for a dividend tax credit. The credit you get will vary based on your tax bracket and the dividend rates in your province. Note: This tax credit doesn\u2019t apply to foreign stocks.<\/td>If you make $1,000 in dividends on your investment and your marginal tax rate is 30%, you\u2019ll pay only a portion of this rate for eligible dividends.<\/td><\/tr>
    Capital gains<\/td>You\u2019ll pay capital gains tax in Canada on the difference when you buy a stock or ETF and then sell it for a higher price.<\/td>50% of gains under $250,000 and 66.67% of gains above $250,000 are taxable. Note: This capital gains tax reduction doesn\u2019t apply to day traders, whose profits are fully taxable as business income.<\/td>If you buy a stock for $1,000 and sell it for $2,000, you\u2019ll pay 50% capital gains tax on the profit you make (in this case, $1,000). If your marginal tax rate is 30%, you would only pay this on $500 as capital gains tax (equal to $150 in this case).<\/td><\/tr><\/tbody><\/table>
    \n
    \nDive deeper: <\/span>How is interest taxed on my savings account?<\/a>\n<\/div>\n<\/article>

    Factor 2: How stocks are taxed by investor type<\/h3>

    The type of investor you are will influence how you are taxed.<\/p>