Yes, dividends are considered taxable income. Even if the payout is reinvested or left within your account, you will be taxed. The good news is that Canada has a dividend tax credit that significantly lowers how much you’ll owe for dividends received from Canadian stocks. How much you pay in taxes will depend on your province, so it’s always best to consult a tax pro to understand how much you owe. Note: you’re not responsible for paying taxes if your dividend stock is kept in an RRSP or TFSA, at least not while the money remains in those accounts.