XEQT after tax return calculator, by province and account type

The calculator

Enter your province, account type, taxable​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ income and the dollar amount you hold in XEQT. The tool applies XEQT's real distribution composition, taken line by line from BlackRock Canada's year end T3 files, and prices each component at the rate that actually applies to it. It shows the same figure for the other two account types alongside, so the comparison is immediate.

Why the RRSP treaty exemption does not reach XEQT

PWL Capital's foreign withholding tax​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ white paper states the mechanism clearly. A US listed ETF of US stocks bought directly on a US exchange, a Type A fund, pays zero withholding inside an RRSP. A Canadian listed ETF holding US stocks or a US listed US ETF, a Type B fund, does not: in the paper's words, "unlike with Type A funds, there is no exemption from this withholding tax when Type B funds are held in an RRSP." XEQT's US exposure is Type B in substance.

In one sentence, because it contradicts what most Canadians have been told: holding XEQT in an RRSP does not eliminate US withholding tax, and holding ITOT or VTI directly in an RRSP does. That is a structural cost of the all in one convenience, and it appears on no fund fact sheet.

This does not mean XEQT is a bad RRSP​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ holding: the cost is low tens of basis points and the simplicity is worth something. Nor that an RRSP is a bad account: the deferral on everything else is complete. It means one specific belief, that US withholding goes away in an RRSP, is false for this fund.

The holdings files make it immediate.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ As of 2026-09-22 XEQT held XTOT at 30.43%, XIC at 25.36%, XEF at 24.19%, ITOT at 15.00%, XEC at 4.92% and 0.11% cash, for total US exposure of 45.43%. XTOT's own file shows 99.93% ITOT. XEC's shows 99.96% EEM, a US listed emerging markets fund, which adds a second withholding layer on top of the first.

2026 top combined marginal rates by province and territory

These are top combined federal and provincial or territorial marginal rates for the 2026 tax year, current to January 15, 2026, extracted from EY's per jurisdiction tables. Provincial budgets tabled after that date are not reflected. The dividend columns are expressed as a percentage of the actual cash dividend received, not of the grossed up taxable amount, and the capital gains column is a percentage of the full gain, not of the taxable half. That is the EY convention, and it is what a calculator that multiplies a raw distribution amount should use.

Notice how far apart the eligible dividend​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ column runs, from 28.33% in the Northwest Territories to 46.20% in Newfoundland and Labrador, even though the federal half of that calculation is identical everywhere. The spread is entirely provincial dividend tax credit policy. That is why account location advice that ignores your province is worth very little.

What XEQT actually distributes: 2024 and 2025 composition

A distribution from an all equity ETF​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ is not one kind of income. It is four or five kinds, each taxed differently, and the mix moves year to year. Here are XEQT's actual year end T3 characteristics for the two most recent complete tax years.

The 2025 column is distorted. Use 2024 as the run rate.

Two consequences. For a steady state​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ answer, run the calculator on the 2024 mix. And a reinvested distribution is taxable in a non registered account in the year received and raises your adjusted cost base, but it pays no cash to settle the tax with. A tool that treats it as cash yield is wrong twice, on cash flow and on future ACB.

A defensible steady state, stated as​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ an estimate derived from two observed years rather than as a measurement: roughly 25% to 27% eligible Canadian dividends, roughly 50% to 55% foreign income, zero to 15% capital gains in a normal year but capable of spiking, roughly 4% return of capital, and essentially zero interest. That is consistent with the regional weights, where XIC at 25.36% supplies the eligible dividend share and the 74.5% non Canadian equity supplies the foreign income.

How each type of distribution is taxed

Eligible Canadian dividends: 138% gross up, then a credit

For the 2026 tax year, $100 of eligible​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ Canadian dividends becomes $138 of taxable income. The CRA's line 12000 instruction is to multiply the actual amount by 138% for eligible dividends and 115% for other than eligible. Federal tax is computed on the $138 and reduced by a federal dividend tax credit of 15.0198% of the grossed up amount, or $20.73. The province repeats the exercise with its own bracket rate and its own credit percentage, and those differ materially, which is why the eligible dividend column above has an 18 point spread.

Two things follow that matter more than they look. The gross up inflates net income, not just taxable income: $100 of eligible dividends adds $138 to line 23400, and for a retiree near the OAS recovery threshold that phantom $38 can trigger recovery tax on money never received, as well as touching the age credit and provincial income tested benefits. At low income the mechanism runs the other way, because the credit is a flat percentage of a grossed up amount and below a certain bracket it exceeds the tax on the dividend. More on that in the honesty section below, and a deeper treatment in XEQT dividends.

Capital gains: 50% inclusion, flat, for 2026

Half of a capital gain is a taxable capital gain, included in income and taxed at ordinary rates. There is no $250,000 threshold and no two tier inclusion rate for 2026. This needs saying plainly because the misinformation persists. The 2024 federal budget proposed raising the inclusion rate from one half to two thirds. On January 31, 2025 the Department of Finance deferred the effective date to January 1, 2026. On March 21, 2025 the Prime Minister's Office cancelled the proposal outright, stating that the government would cancel the proposed hike in the capital gains inclusion rate. It did not come into force. It was not merely postponed into 2026.

You can verify it structurally without​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ reading a press release. In the 2026 rate table above, every jurisdiction's capital gains rate is exactly half its ordinary income rate: Ontario 26.76% against 53.53%, Nova Scotia 27.00% against 54.00%, Nunavut 22.25% against 44.50%. Under a two thirds inclusion rate those columns would be two thirds of the ordinary rate. They are not. The only surviving piece of the 2024 package is the higher Lifetime Capital Gains Exemption, which has nothing to do with a publicly traded ETF.

Foreign income: full ordinary rate, no gross up, no credit for the income itself

Foreign dividend income received by​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ a Canadian resident is ordinary income, taxed at the rate in the interest and foreign income column. There is no gross up and no dividend tax credit, because the dividend tax credit exists to integrate Canadian corporate tax already paid and a foreign corporation has paid none. On a Canadian ETF's T3 this is Box 25, with the associated withholding in Box 34.

This is the single biggest driver of the after tax outcome, because foreign income is roughly half of XEQT's distributions and the most heavily taxed component. At the Ontario top bracket, one dollar of foreign dividend income costs 53.53 cents against 39.34 cents for an eligible Canadian dividend and 26.76 cents for a realised capital gain. You report the gross foreign income and then claim the credit. BlackRock's numbers confirm the gross up: for 2025, 1.03301 gross less 0.04850 foreign tax paid equals exactly the 0.98451 distributed.

Return of capital: deferred, not free

Foreign withholding by account type: what is recovered and what is lost

Level I withholding is levied by the​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ country where the stock is domiciled, on the first entity to receive the dividend. Level II is an additional 15% withheld by the US when a US listed ETF holding non US stocks pays on to a Canadian holder. XEQT touches both: the US sleeves and XEF incur Level I, and XEC, which holds a US listed emerging markets fund, incurs Level I plus Level II on the way out of the US.

In a non registered account you receive​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ a T3 showing foreign tax paid and claim the federal foreign tax credit on line 40500 using Form T2209, plus a provincial equivalent. Two limits matter. The credit on income from foreign property other than real property is capped at 15% of net income from that property, with the excess deductible under subsection 20(11); the 15% treaty rate means the cap rarely bites. And the credit is non refundable and limited by the Canadian tax otherwise payable on that income.

What the drag actually costs

Two numbers circulate, and they are​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ not the same kind of number. Keep them apart.

The measured figure is 0.12% of NAV per year. XEQT's Box 34 foreign tax paid was 0.04850 per unit in 2025 and 0.04731 per unit in 2024. Against a NAV of roughly $39.80 as of 2025-10-31, the 2025 figure works out to about 12 basis points a year. That is an observation from the fund's own slips, not a model. It is recoverable in a non registered account through the foreign tax credit, and permanently lost in an RRSP, a RRIF, a TFSA and an RESP.

The roughly 0.23% figure is an estimate. It comes from applying PWL's structural drag rates to XEQT's 2026-09-22 weights: 0.31% on the 45.43% US sleeve, 0.26% on the 24.19% XEF sleeve, 0.63% on the 4.92% XEC sleeve and zero on XIC, weighting out to roughly 23 basis points. It is larger than the measured figure for two reasons, one legitimate and one not. Legitimately, it captures the Level I withholding buried inside EEM, which never appears on a Canadian slip. Less legitimately, PWL's rates rest on April 2016 dividend yields, higher than today's, so the estimate carries an upward bias. Treat 0.23% as an upper bound and 0.12% as the floor of what you can prove.

So holding XEQT in an RRSP or a TFSA​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ costs 12 to 23 basis points a year in unrecoverable foreign withholding, on top of the 0.19% MER (management fee 0.17%, reduced from 0.18% effective 2025-12-18, per the BlackRock product page as of 2026-09-22). On $100,000 that is $120 to $230 a year. Not catastrophic, but not zero, and not what most people think is happening.

In a non registered account almost all​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ of that comes back through the credit, but the account then pays full Canadian tax on the gross foreign income at the ordinary rate, a far larger number. The only permanently unrecoverable piece there is the Level I emerging markets layer inside EEM, roughly one to two basis points at XEC's 4.92% weight.

Where XEQT should sit, once you have the arithmetic

Account location follows mechanically​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ from the sections above, and the ordering is less dramatic than the internet suggests.

• TFSA is the cleanest place for XEQT in pure tax terms if you have room. No Canadian tax on any component, no tax on growth, no tax on withdrawal. You lose the foreign withholding, but you lose it in the RRSP too, so it is not a differentiator between the two.
• RRSP or RRIF defers all Canadian tax until withdrawal, at which point the whole withdrawal is ordinary income. It loses the same 12 to 23 basis points. The treaty exemption does not apply, so do not choose an RRSP over a TFSA for withholding reasons. Choose on your marginal rate now against your expected rate in retirement, the subject of TFSA vs RRSP for XEQT.
• Non registered is the expensive one and the calculator shows by how much. Roughly half the distribution is foreign income taxed at your full ordinary rate with no credit for the income itself, which is the single biggest line in the result. The withholding is recovered, which softens the blow by 12 basis points, but the Canadian tax on the gross amount swamps it.
• If the withholding line genuinely bothers you, the fix is not a different account but a different holding: ITOT or VTI bought directly in an RRSP, exempt under Article XXI(2), with the rest built around it. That means a four fund portfolio, currency conversion and rebalancing. Most people should not do this for 15 to 30 basis points.

When the difference is too small to act on

An honest section, because most of what​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ is written about this topic is not proportionate.

On a $25,000 position the entire unrecoverable​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ withholding drag is $30 to $58 a year. Restructuring into four funds to recover that is a bad trade against behavioural error, rebalancing mistakes, conversion spreads and the chance you stop contributing because the process got annoying. The all in one fund exists because that risk is real and expensive.

Below the top bracket the gaps between​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​​‌‌‌‌​‌‌‌‌​​‍‌‌​‌​‌​‌​‌‌​​‌‌‌‌‌‌‌‌‌‌‌‌‌‌​​​‌ income types compress too. Ontario's top table shows a 27 point spread between foreign income and capital gains, but in a lower bracket the absolute spread is smaller, because the capital gains rate is always exactly half the ordinary rate. If your income is well under the threshold, the numbers here are ceilings and your real spread is narrower.

What this calculator does not do

• It does not use lower bracket rates. The sourced table is EY's 2026 top combined marginal rates. Where your taxable income is below the top bracket threshold, the tool says so and labels its output a ceiling rather than silently pretending. Building a full 13 jurisdiction bracket engine is a different project and we will not fake it with rates we have not sourced.
• It does not show the negative eligible dividend rate at low incomes. Because the gross up is flat at 38% while the credit is a flat percentage of the grossed up amount, the combined dividend tax credit can exceed the tax on the dividend in the lowest brackets, producing a genuinely negative effective rate. TaxTips.ca publishes Ontario's first bracket at a negative rate for 2026. EY, the source behind our table, floors these at 0.00% by construction, noting that where the credit exceeds tax otherwise payable the rates do not reflect the excess. The effect is real, the excess credit is non refundable and usable only against other income, and we will not publish a low income table we cannot source.
• It does not model the OAS recovery tax. The 2026 threshold could not be confirmed on the CRA and Service Canada repayment page, which still showed only the 2025 figure when this page was built on 2026-09-23. We would rather omit it than hard code a number from a secondary source.
• It does not compute Quebec precisely. Quebec taxable income is computed differently from federal taxable income, and Quebec levies a health services fund contribution on non employment income that the EY table excludes. A Quebec result here is slightly understated.
• It does not model Alternative Minimum Tax, which can override the rate tables entirely.
• It does not track your adjusted cost base. Return of capital of roughly 4% a year reduces ACB, and reinvested capital gains distributions increase it. Both matter when you sell. Neither is in the annual number.
• It uses an approximate yield. Gross distributions per unit are divided by a single reference NAV of $39.802860 as of 2025-10-31 to produce a distribution yield. NAV moves through the year, and the 2024 per unit figures are being divided by a 2025 NAV. The composition percentages are exact. The dollar magnitudes are approximate.
• It does not use 2026 composition, because 2026 composition does not exist yet in final form.

Frequently asked questions