Tool 04 · Investing

TFSA vs Taxable

See the real cost of Capital Gains Tax and Dividend Withholding Tax over decades. Prove to yourself why maxing your TFSA is priority number one.

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Investment Parameters

Monthly Contribution (R)

Investment Period (years)

Annual Return (%)

Dividend Yield (%)

Marginal Tax Rate (%)

TFSA capped at R46,000/year (R500,000 lifetime). Excess goes to the taxable account. Dividend Withholding Tax: 20%. CGT calculated at exit using 40% inclusion rate.

Tax Cost Over 20 Years

R-32 628

This is how much more you'd have by using a TFSA vs a regular taxable account — the combined cost of Dividend Withholding Tax and Capital Gains Tax.

After 20 Years

TFSA (Tax-Free)

ContributedR500 000

Final ValueR1 954 757

Tax PaidR0

Taxable Account

ContributedR720 000

Pre-Tax ValueR2 159 709

CGT on Exit-R172 324

After-Tax ValueR1 987 385

Growth Over Time

Year	TFSA Value	Taxable Value	Tax Drag
5	R241 762	R238 972	R2 790
10	R631 122	R616 892	R14 230
15	R1 213 750	R1 214 549	R-799
20	R1 954 757	R2 159 709	R-204 952

Tax drag shows the cumulative difference between TFSA and taxable accounts, primarily driven by annually reinvested dividend tax. CGT on exit not included in yearly figures.