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Calculator · Dividends
How much capital does your dividend income goal need?
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The calculator determines the capital whose dividends pay a chosen monthly income after tax at a dividend yield you assume. Tax follows the choice of where you are taxed: the German model or your own rate on dividends.
What your portfolio pays you a month, and its yield over the last 12 months.
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How much capital does it take for dividends to pay a chosen income? The calculator works backward from the amount you want each month after tax, the dividend yield you expect and where you are taxed. It shows the capital needed, together with the dividends before tax, the tax and the dividends after tax, per year and per month.
Choose your money with Currency and enter the monthly income you want after tax and the yield. Under Where are you taxed? you choose Elsewhere, with your own tax rate, or Germany, with the German model described below.
The dividend yield is the annual dividend as a share of the capital. Turned around, the capital is the annual dividend before tax divided by the yield. The calculator first finds the dividend before tax that leaves your income after tax, then divides it by the yield:
Income after tax a year = monthly income × 12 Dividends before tax = income after tax ÷ (1 − tax rate) Capital needed = dividends before tax ÷ yield
Under Elsewhere, the tax rate is the one you enter, applied to the whole dividend, with no allowance or exemption. A rate of 0 shows the result before tax. The math is the same in every currency.
For 1,000 a month after tax at a 3% yield and a 15% tax rate, the income after tax is 12,000 a year. Dividends before tax are 12,000 ÷ 0.85, about 14,118, of which about 2,118 is tax. The capital needed is 14,118 ÷ 3%, about 470,588.
The yield weighs more than any other input: at the same income and tax, half the yield means twice the capital.
Companies can raise, cut or suspend dividends, and a fund's distribution yield moves with the dividends of its holdings and with its price. A yield from the past twelve months describes what was paid, not what will be paid, and a high yield can reflect a fallen price as much as a rising dividend. Entering the yield one percentage point lower and higher shows how wide the range of capital needed is.
An income can also come from selling units: the withdrawal plan calculator models that path, and the FIRE calculator works from expenses and a withdrawal rate instead of a yield.
In Germany, dividends and fund distributions are capital income under the flat tax (Abgeltungsteuer): 25% plus the 5.5% solidarity surcharge on it, 26.375% in total without church tax, and about 27.8% or 28.0% with church tax at 8% or 9%. The calculator uses the tax profile you enter. Two rules lower the tax:
The calculator asks whether your dividends come from equity funds or individual shares and solves for the dividend before tax that leaves your income after tax:
Dividends before tax = (income after tax − rate × allowance) ÷ (1 − rate × (1 − partial exemption))
If the taxable part of the dividends stays within the allowance, no tax is due, and the dividends before tax equal the income after tax. German tax is calculated in euros, so this model needs EUR as the currency.
| Source of the dividends | Dividends before tax a year | Tax a year | Capital needed |
|---|---|---|---|
| Equity funds | 14,394 | 2,394 | 479,789 |
| Individual shares | 15,941 | 3,941 | 531,353 |
On equity funds the tax takes about 16.6% of the dividends, on individual shares about 24.7%. The whole difference comes from the partial exemption: it raises the capital needed for individual shares by about 51,600.
Two German details are not modeled. Foreign withholding tax on dividends from foreign shares can be credited against German tax only up to a limit, and any excess has to be reclaimed from the source country or remains a cost; how that works is explained in Dividends after tax: what actually lands in your account. The advance tax on funds (Vorabpauschale), which can apply when a fund's distributions fall short of its base return, is not included either. The model also assumes the whole saver's allowance is available for these dividends; if interest or other gains use part of it, the tax is higher.
The capital is assumed to stay intact: the income comes from dividends alone, and no units are sold. The result is a snapshot: it does not grow the dividends over time or adjust for inflation, so an income that is enough today buys less in twenty years. Costs are not deducted, and the market value of the capital, which rises and falls, plays no part.
The capital needed is what the entered yield and tax produce, not an amount that secures an income. Because dividends vary from year to year, the income from a given capital varies with them. The result is most useful as a scale: it shows how much of the goal depends on the yield, and how much on tax.
The calculator shows the capital that the entered yield, income and tax require. It is not a forecast of any dividend, not a recommendation to buy dividend shares or funds and not a tax assessment.
It depends on the yield and on tax. At a 3% dividend yield and a 15% own tax rate, the calculator arrives at about 470,588. Taxed in Germany (single filer, no church tax), it arrives at about EUR 479,789 through equity funds and about EUR 531,353 through individual shares.
It finds the dividend before tax that leaves your income after tax, then divides it by the yield. Under Where are you taxed?, Elsewhere applies your own rate to the whole dividend, with no allowance; 0 shows the result before tax. Germany applies the flat tax, solidarity surcharge, optional church tax, saver's allowance and partial exemption, in EUR.
Because of the partial exemption (Teilfreistellung): 30% of distributions from equity funds are tax-free, while dividends from individual shares have none. At EUR 1,000 a month and a 3% yield, tax takes about 16.6% of the dividends on equity funds and about 24.7% on individual shares.
The calculator does not suggest a yield. Dividends can be raised, cut or suspended, and a yield from the past twelve months describes what was paid, not what will be paid. Entering a lower and a higher yield shows how much the result depends on this one assumption.
No. The result is a snapshot without inflation, dividend growth or costs. In the German model, foreign withholding tax, which can be credited only up to a limit, and the advance tax on funds (Vorabpauschale) are not included, and the full saver's allowance is assumed to be available for these dividends.
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Amounts are in the currency you choose. Unfinished entries retain their original number notation when the language changes.
Dividends a year as a share of the capital, 0.1 to 15%.
Your tax on dividend income. 0 shows the result before tax.
Your dividend income goal
Tax at your own rate of 0% on every dividend.
Capital needed
USD 400,000At a dividend yield of 3% a year. Yields change over time; this is not a forecast.
Dividends before and after tax
| In USD | Per year | Per month |
|---|---|---|
| Before tax | 12,000 | 1,000 |
| Tax | 0 | 0 |
| After tax | 12,000 | 1,000 |