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This dividend calculator projects the monthly and annual passive income you will get by reinvesting dividends (DRIP), from your initial investment, monthly savings, dividend yield and annual dividend growth.
Monthly income
3091 €
Annual income
37.093 €
Final portfolio
349.501 €
The power of compounding in dividends
This calculation assumes full reinvestment of dividends (DRIP) and organic dividend growth by the companies. Total capital contributed is 145.000 €.
Dividend Growth Investing does not look for the companies paying the most today, but for those with the ability and the commitment to raise their payout year after year sustainably.
The end goal is to build a passive income that covers your living costs without having to sell your shares ("living off the income").
"Do you know the only thing that gives me pleasure? Seeing my dividends come in."
— John D. Rockefeller
This concept is key: it is the dividend yield calculated on your original purchase price, not on the current price.
If you bought a share at €100 paying €3 (a 3% yield) and, over the years, the company raises the dividend to €10, your Yield on Cost will be 10%, whatever the share is trading at. This is the long-term DGI investor's measure of success.
Each year, the calculator multiplies the invested capital by the dividend yield to get that year’s dividends. It then reinvests them, adds twelve months of your savings and raises the dividend yield by the growth rate you set, because dividend-growth companies increase their payout year after year.
Year’s dividends = capital × dividend yield · Next capital = capital + dividends + savings × 12
The portfolio is measured at cost (what you put in plus what you reinvested), not at market price, and dividend growth is applied to all of it, including the reinvested part. So beyond 20 years and with high growth rates the figure is optimistic: use it to compare scenarios, not as a forecast. It does not deduct taxes or fees either.
Four scenarios worked out with the calculator’s own function, with dividends reinvested. The third one shows that a high dividend that barely grows wins in the early years and loses later against a moderate one that grows.
| Scenario | At 10 years | At 20 years |
|---|---|---|
| €0 + €300 a monthYield 4 %, growing 5 % a year | €251 a monthportfolio €46,237 | €1,379 a monthportfolio €155,872 |
| €25,000 + €500 a monthYield 4 %, growing 5 % a year | €640 a monthportfolio €117,896 | €3,091 a monthportfolio €349,501 |
| €25,000 + €500 a monthYield 6 %, growing 2 % a year | €788 a monthportfolio €129,307 | €2,730 a monthportfolio €367,400 |
| €50,000 + €1,000 a monthYield 4 %, growing 5 % a year | €1,280 a monthportfolio €235,792 | €6,182 a monthportfolio €699,002 |
Assumptions: full dividend reinvestment (DRIP), constant growth, portfolio at cost, no taxes or fees. They are the calculator’s; below we explain what taxes take in Spain.
Withholding. Every dividend from a Spanish company arrives with 19% withheld by the tax agency: from €100 gross you receive €81. The withholding is a payment on account; the final bill is settled in the annual tax return.
Savings scale. Dividends are taxed in the savings base of Spanish income tax (IRPF) together with interest and capital gains: 19% up to €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000 and 30% above that (current scale, AEAT 2025 tax return manual). The calculator works gross: a 4% dividend yield becomes 3.24% net at the lowest rate.
Foreign shares. The source country withholds first (15% in the United States if your broker applies form W-8BEN) and Spain taxes the dividend again. In your tax return you can deduct the foreign withholding up to the limit set by the double-taxation treaty; anything a country withholds above that limit has to be reclaimed from its tax authority.
Reinvesting does not avoid the tax. A dividend you receive is taxed even if you reinvest it the next day; the calculator’s DRIP is gross. Investors who want to defer taxes use accumulating funds or ETFs, which reinvest internally without paying out, and pay tax only when they sell.
The dividend yield is the annual dividend per share divided by the share price. It is the figure you will see on any stock quote page and the one the calculator asks for as a starting point.
Dividend yield = annual dividend per share / share price × 100
As a reference, the IBEX 35 has historically offered around 4% and the S&P 500 under 2%, because its companies reinvest more and pay out less. Be wary of very high yields: they often signal a collapsed price or a dividend about to be cut. For annual dividend growth, 5% is a common reference in dividend-growth portfolios; dividend aristocrats have raised theirs for more than 25 years.
It is the annual dividend a share pays divided by its price, as a percentage. A €50 share paying €2 a year has a 4% dividend yield. It is the calculator’s starting figure.
Multiply the invested capital by the dividend yield: €25,000 at 4% is €1,000 a year, about €83 a month gross. The calculator repeats that calculation every year, reinvesting the dividends and adding your savings.
At a 4% dividend yield, €300,000 (€12,000 a year divided by 0.04). If you want €1,000 net after the 19% withholding, about €370,000. The calculator tells you how many years it takes if you reinvest.
Dividend reinvestment plan: using every dividend you receive to buy more shares, so the next dividend is calculated on more capital. It is compound interest applied to income, and the assumption the calculator uses.
In Spain, between 19% and 30% depending on the savings base of your income tax; the broker withholds 19% when you receive them. Foreign dividends also suffer their country’s withholding, deductible up to the treaty limit. The calculator does not deduct taxes.
No. It is an educational tool that applies a formula to the data you enter, without knowing your tax or personal situation. To make decisions about your portfolio, consult an adviser registered with the CNMV.