Dividend tax

Okay kiddo, so you know how sometimes when you do chores or help out, your parents might give you some money as a reward, right? Well, when you own a share of a company, you are kind of like a helper for that company. And when that company makes a lot of money, they might share some of that money with you and the other shareholders. That's what we call a dividend.

Now, just like when you get some money from your parents, the government might also want a little bit of that money too. That's where dividend tax comes in. The government wants to take a small percentage of the money you make from dividends and use it to help pay for things like roads, schools, and hospitals.

But don't worry, it's not too complicated. The dividend tax rate is usually lower than the rate you pay on your regular income, and not everyone has to pay it. If you don't make very much money from dividends, you might not have to pay any tax at all!

So just remember, when you own a share of a company and they give you some extra money as a dividend, the government might want a small piece of it to help everyone else.