TOSI & Spouse Income-Splitting Calculator
Screen your dividend or salary sprinkling against the 2026 TOSI excluded-shares, excluded-business and age-65 tests, then see the real household tax savings.
TOSI (Tax on Split Income) is NOT a percentage-cap system like some countries' spouse-splitting rules — it is a binary gate: dividends/certain income paid to a 'specified individual' (typically a spouse or adult child) are either FULLY exempt from TOSI or FULLY taxed at the top federal+provincial marginal rate on the entire amount, with no partial/pro-rated outcome. maxSharePct=1 therefore models 'up to 100% of the dividend stream can be split tax-effectively IF an exemption applies' rather than a real percentage ceiling. The main exemptions, current for 2026: (1) EXCLUDED SHARES — the recipient directly owns shares representing at least 10% of both the votes AND the fair market value of the corporation, the corporation earns LESS than 90% of its business income from providing services, and all/substantially all (generally ≥90%) of its income is not derived from another related business; (2) the recipient is meaningfully engaged in the business (the 'excluded business' test, generally interpreted via a CRA administrative 20-hours-per-week-average test in the current year or any 5 prior years); (3) the age-65 exemption — once the business owner turns 65, dividends to a spouse/common-law partner are exempt from TOSI (mirroring pension-income-splitting eligibility under s.60.03); (4) a 'reasonable return' safe harbour based on the recipient's own labour/capital/risk contribution, with a lighter test for adults aged 18-24 tied to arm's-length business/capital-gains inheritance rules. If NONE of these apply, 100% of the split income is taxed to the recipient at the top marginal rate (federal 33% + Ontario 13.16%, before surtax) regardless of the recipient's own income level — so maxShareAmount (a dollar cap) is deliberately omitted as inapplicable; this is a documentation flag for the UI, not an official CRA percentage.
Why splitting dividends with a spouse is an all-or-nothing test under TOSI
Splitting business income with a spouse used to be a straightforward way to move income into a lower tax bracket. Since the 2018 Tax on Split Income (TOSI) rules, it's become an all-or-nothing test rather than a sliding scale: if a dividend or other split income to a spouse doesn't qualify for a specific exemption, the entire amount is taxed to them at the top federal and Ontario marginal rate, 46.16% combined before any surtax, regardless of how little other income they have.
This calculator screens your situation against the main 2026 TOSI exemptions — excluded shares, meaningful involvement in the business, the age-65 exemption, and the reasonable-return safe harbour — before estimating what income splitting would actually save your household if it qualifies.
The main TOSI exemptions this calculator checks
- Excluded shares — the recipient directly owns at least 10% of both the votes and the fair market value of the corporation, the business earns less than 90% of its income from services, and substantially all of its income doesn't come from another related business
- Excluded business — the recipient is meaningfully engaged in the business, generally assessed against a CRA administrative benchmark of about 20 hours a week on average, in the current year or any five prior years
- The age-65 exemption — once the business owner turns 65, dividends paid to a spouse or common-law partner are exempt from TOSI, mirroring pension income-splitting rules
- A reasonable-return safe harbour based on the recipient's own labour, capital or risk contribution, with a lighter test for adults aged 18 to 24
