Many companies pay out dividends either on an annual, semi-annual, quarterly, or monthly basis.
Below is an example of a company declaring dividends.
Ex/EFF Date: The ex-dividend date or ex-date marks the cutoff point for shareholders to be credited a pending stock dividend. To receive the upcoming dividend, shareholders must have bought the stock before the ex-dividend date. Share prices usually drop by the amount of the dividend on the ex-dividend date.
Cash Amount: The dividend amount per share to be paid to investors
Declaration Date: This is the date on which the company announces that it will be issuing a dividend in the future
Record Date: This is the cut-off date used to determine which shareholders are entitled to a corporate dividend. To be eligible for the dividend, you must buy the stock at least two business days before the record date.
Payment Date: The date on which the dividends will be paid out.
You can find applicable dividend dates by searching for an asset here: https://www.nasdaq.com/market-activity/quotes/dividend-history
There are dividend taxes applicable for non-US residents invested in companies trading on the US market. Below are examples for both US and Canadian companies.
US Stocks/Companies:
All assets trading on the US markets are subject to the dividend withholding tax. This is a tax that is deductible from dividends before they are paid out. This tax is 30%. For example, if an ETF is paying a dividend of $1, you would receive $0.7 in your account. This tax is automatically deducted at source, so no action is required on your end.
Taking the example from the graphic above:
ABC Dividend rate= $1.13/share
Total ABC shares owned as of Ex-date = 100 shares.
Eligible dividend= 100 * $1.13 = $113.00
Applicable US Withholding tax of 30%= $113.00 * 0.7= $79.10 - This is the final amount that will be paid
Canadian Stocks/Companies:
When investing in Canadian companies through a US-based broker such as ours, the 30% tax isn't applicable, however there is a 15% withholding tax applied at source.
Please note this tax is not calculated the same as the 30% but rather applied to the dividend rate.
Taking the example from the graphic above (assuming it's a Canadian company now):
ABC Dividend rate= $1.13/share
Rate after Canadian 15% withholding tax= $1.13 * 0.85= $0.9605/share
Total ABC shares owned as of Ex-date = 100 shares.
Eligible dividend= 100 * $0.9605 = $96.05
Please note, our clearing firm holds Canadian dividends for 2 business days after payable date because they have to reflect tax withholding adjustments. These dividends will be paid into your account 2 business days after the payment date.