Dividend Reinvestment Plan Calculator NZ

This calculator shows how reinvesting your dividends through a dividend reinvestment plan, or DRP, grows a share investment in New Zealand over time, compared with taking the dividends as cash and relying on share price growth alone. A DRP is offered by many New Zealand companies and lets your dividends automatically buy more shares, usually without brokerage and often at a small discount. The power of it is compounding: those extra shares earn their own dividends, which buy yet more shares, so the holding snowballs in a way that simply spending the dividends never matches. You enter your starting investment, the dividend yield, the expected annual price growth and the number of years, and the calculator projects the value with dividends reinvested, the value from price growth only, and the boost that reinvesting adds. It assumes the dividend yield is reinvested and compounds alongside price growth. Use it to see the long-run value of reinvesting and to decide whether to switch on a DRP or take the income. Bear in mind that reinvested dividends are still taxable income in New Zealand, usually carrying imputation credits, so you must account for the tax even though no cash lands in your account. Returns are not guaranteed. This is general information, not financial advice.

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$47,347
value with dividends reinvested
Price growth only$32,578
Boost from reinvesting$14,769

Assumes dividends are reinvested and compound with price growth. Reinvested dividends are still taxable income in New Zealand. Returns are not guaranteed. General information only.

How it works

The value with dividends reinvested grows the starting investment at the combined rate of price growth plus dividend yield, compounded over the years. The price-growth-only value grows at the price growth rate alone, as if dividends were taken as cash. The boost from reinvesting is the difference between the two.

Worked example

A 20,000 dollar investment with a 4 percent yield and 5 percent price growth over 10 years grows to about 47,347 dollars with dividends reinvested, versus about 32,578 dollars on price growth alone, a boost of roughly 14,769 dollars from reinvesting.

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Frequently asked questions

What is a dividend reinvestment plan?

A DRP automatically uses your dividends to buy more shares instead of paying cash, often without brokerage. Over time the extra shares earn their own dividends, so your holding compounds faster than relying on share price growth alone.

Are reinvested dividends still taxed?

Yes. Even though you receive shares rather than cash, the dividend is still taxable income in New Zealand, usually with imputation credits attached. You need to account for the tax even though no cash arrives in your account.

Is reinvesting always better?

For long-term growth, reinvesting usually builds more wealth thanks to compounding. But if you rely on the income, taking dividends as cash makes sense. This tool shows the difference so you can decide based on your goals.