How our calculators work

Dividend calculator (projection engine)

Time steps

The simulation runs in weekly steps, 52 per year. Events are spread evenly through the year: monthly events fall roughly every 4.3 weeks, quarterly events every 13 weeks. Using one shared calendar means any combination of payout and contribution frequencies lines up correctly.

Share price

price each week = previous price × (1 + annual price growth)^(1/52)

This compounds to exactly your annual price growth rate over a full year.

Dividends

dividend per share in year n = starting annual dividend × (1 + dividend growth)^(n − 1) each payment = shares held × dividend per share ÷ payments per year

The dividend per share steps up once a year, which reflects how most US companies announce raises. Dividends are paid on shares held at the payment date.

Taxes

If you choose a taxable account, your tax rate is deducted from each payment before it is reinvested or added to cash. This models paying the tax from the dividend itself. Tax-advantaged accounts use a 0% rate.

Reinvestment (DRIP)

shares bought = dividend after tax ÷ price that week

Fractional shares are allowed and there are no trading costs, which matches how most US brokers handle dividend reinvestment today. With DRIP off, dividends accumulate as cash that earns no interest.

Contributions

Contributions buy shares at the price on their scheduled week. An optional yearly increase raises the contribution amount at the start of each new year.

Results

• Monthly income is the forward run-rate at the end of the period: shares held × next year's dividend per share × (1 − tax rate) ÷ 12.
• Yield on cost is that annual income divided by the total money you contributed (initial amount plus contributions). Reinvested dividends are not counted as contributions.
• Annualized return is the internal rate of return (IRR) of your cash flows: every contribution as money in, the final balance as money out. Unlike a simple growth rate, it accounts for the timing of contributions.
• Today's dollars divides each future value by (1 + inflation)^years.

Balance chart split

The balance chart splits each year's value into money you invested, dividends received (capped at the gain so far) and price growth (the remainder). It is a visual decomposition, not a tax calculation.

Dividend income calculator

capital needed = annual income ÷ (yield × (1 − tax rate))

Years to goal runs the projection engine with dividends reinvested, and returns the first year in which forward annual income reaches your target.

Dividend yield calculator

Forward yield = latest regular dividend × payments per year ÷ price. Trailing yield = dividends paid in the past 12 months ÷ price. Yield on cost = forward annual dividend ÷ your cost per share.

Dividend tax calculator

We apply the 2026 standard deduction, tax ordinary income (including non-qualified dividends) at the 2026 brackets, then stack qualified dividends on top and tax them at 0%, 15% or 20%, following the logic of the IRS Qualified Dividends and Capital Gain Tax Worksheet. The tax attributed to dividends is total tax with dividends minus total tax without them. NIIT is 3.8% of the lesser of dividend income and modified AGI above $200,000 (single) or $250,000 (joint), using total income as a proxy for MAGI. Sources: IRS Rev. Proc. 2025-32, IRS Publication 550, IRC §1411.

Limitations

• Growth rates are constant. Real returns vary year to year and dividends can be cut.
• No fund expense ratios, trading fees, state tax or foreign withholding tax.
• Results are hypothetical and depend entirely on the inputs you choose.

Testing and updates

The engine is checked by automated tests against hand-calculated cases, such as a flat price with a 10% yield, compounding over two years, contribution totals and IRR for a lump sum. Tax tables are updated each year after the IRS publishes inflation adjustments. Changes to the methodology are dated on this page.

Methodology version 1.0, October 2026.