i What this calculator does
Quick answer: Project a portfolio with dividends reinvested, after 20% withholding tax, and see how much of the final value comes from reinvestment. With the default inputs (starting investment 200 000, dividend yield 4.5), it returns value with reinvestment of R1 420 169.97.
Reinvesting dividends buys more shares, which pay more dividends, which buy more shares. Over long periods that compounding accounts for a large share of total equity returns, often more than price appreciation alone.
The South African complication is that dividends carry 20% withholding tax before you can reinvest them, unless the shares sit inside a tax-free savings account. This runs both, so the difference is visible rather than assumed.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Dividend Reinvestment Calculator
You do not have to fill anything in to begin. Each field opens with a value that works, so you can change one and compare.
- 1. Starting Investment (R)
- 2. Dividend Yield (%)
- 3. Annual Dividend Growth (%)
- 4. Annual Price Growth (%)
- 5. Years
- 6. Account Type
The result panel reports:
- Value With Reinvestment After
- Value Without Dividends taken as cash
Alongside the headline figures, the calculator reports starting investment, dividends reinvested, withholding rate, yield on original cost. Those are the numbers that usually explain why the headline result came out where it did.
The steps that produced the number are listed below it, which is what makes the output verifiable.
See also: Asset Allocation Calculator.
Common results
What the calculator returns as the starting investment changes, with every other input at its default (dividend yield 4.5, annual dividend growth 6, annual price growth 7, years 20, account type Ordinary, 20% withholding).
| Starting Investment | Value With Reinvestment | Value Without | Reinvestment Adds |
|---|---|---|---|
| R50 000 | R355 042.49 | R259 698.29 | R95 344.20 |
| R100 000 | R710 084.98 | R519 396.57 | R190 688.41 |
| R200 000 | R1 420 169.97 | R1 038 793.15 | R381 376.82 |
| R400 000 | R2 840 339.93 | R2 077 586.30 | R762 753.63 |
| R1 000 000 | R7 100 849.83 | R5 193 965.75 | R1 906 884.09 |
| R2 000 000 | R14 201 699.67 | R10 387 931.49 | R3 813 768.17 |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Dividends Tax: 20% withheld for residents. Source: Dividend Withholding Tax by Country (verified 27 September 2026).
- Interest exemption: R23,800 a year under 65. Source: Interest and Dividend Exemptions (verified 29 September 2026).
How the calculation works
Six inputs drive the result: Starting Investment, Dividend Yield, Annual Dividend Growth, Annual Price Growth, Years and Account Type. The each year is dividend = value x yield x (1 - 20%). The reinvest is value = value x (1 + 7.0%) + dividend. The after 20 years is R1 420 169.97. The difference is R1 420 169.97 - R1 038 793.15 = R381 376.82. The breakdown also lists starting investment, years, starting dividend yield and dividend growth.
A worked example in rand
Run it with the inputs it opens with, starting investment R200 000, dividend yield 4.5%, annual dividend growth 6%, annual price growth 7%, years 20 and account type Ordinary, 20% withholding, and the value with reinvestment comes out at R1 420 169.97, after 20 years. The other figures are value without R1 038 793.15 and reinvestment adds R381 376.82. Now set the starting investment to 400 000: the value with reinvestment moves from R1 420 169.97 to R2 840 339.93, the value without moves from R1 038 793.15 to R2 077 586.30 and the reinvestment adds moves from R381 376.82 to R762 753.63.
How to read the result
For the default case the verdict is: "Withholding tax removes a fifth of every dividend before it can be reinvested. The same plan inside a TFSA compounds on the full amount." Read it as a flag rather than advice: it tells you where the numbers sit relative to the usual rules of thumb. Judge income on the after-tax yield and the cover: two shares with the same headline yield can differ completely in how much reaches you and how safe it is. Interest and Dividend Exemptions explains the thinking behind these figures.
The South African angle
Using the dividend reinvestment calculator from South Africa adds a few local facts to the arithmetic. Shares held inside a tax-free savings account receive dividends free of the 20% tax, which is the single largest advantage of the account for an income investor. Real estate investment trusts on the JSE distribute most of their income as interest rather than dividends, which is taxed as income at the holder's marginal rate rather than at 20%. Non-resident shareholders can reclaim part of the 20% Dividends Tax under a treaty, usually down to 5% or 15%, which is the reverse of the calculation a South African investor in foreign shares runs. The dividend reinvestment calculator draws on the same figures, which are kept on the dividend withholding tax by country table and updated as they change.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
Do South African brokers offer automatic reinvestment?
Some do, and several platforms will reinvest into the same share or into a default fund. Where it is not automatic you can reinvest manually, though brokerage on small amounts makes frequent reinvestment less efficient than quarterly or annual batches.
How much of a long-run return comes from dividends?
A large share, and more the longer the period. Over multi-decade horizons reinvested dividends have historically accounted for a substantial part of total equity returns, which is the argument for reinvesting rather than spending them during accumulation.
Does the 20% withholding tax really matter that much?
Over twenty years, yes. Reinvesting eighty cents instead of a rand, every year, compounds into a meaningful gap. That is the strongest practical argument for using the tax-free allowance on income-producing assets first.
What is yield on cost?
The current dividend measured against what you originally paid. With dividend growth and reinvestment it rises over time, and after two decades it can be several times the yield a new buyer receives. It measures your position rather than the share.
Should I reinvest in retirement?
Usually not, because the point of the portfolio then is income. The switch from reinvesting to drawing is the transition from accumulation to withdrawal, and it is worth planning rather than drifting into.
Are fractional shares available?
On several South African platforms, yes, which makes reinvestment far more efficient. Without them a dividend that does not buy a whole share sits as cash until it accumulates.
Want to embed this calculator on your site?
Embed this calculator
Free to use on your own site. Copy the code below and paste it where you want the calculator to appear.
<iframe src="https://www.tradeanswers.co.za/embed/dividend-reinvestment-calculator.html"
width="100%" height="750" style="border:0;max-width:520px"
title="Risk Per Trade Calculator - TradeAnswers" loading="lazy"></iframe>
<p><a href="https://www.tradeanswers.co.za/dividend-reinvestment-calculator.html">Dividend Reinvestment Calculator</a> by <a href="https://www.tradeanswers.co.za/">TradeAnswers</a></p>