Wall St dividend variances

Why is my Wall St dividend lower than expected?

If your Wall St dividend payment seems lower than what was announced, there are a few common reasons – most of them related to tax and international processing.

U.S. dividend withholding tax

The most common reason is U.S. tax being withheld at the source.

• Default rate: The standard U.S. withholding tax on dividends paid to foreign investors is 30%.

• Reduced rate for Australians: Thanks to the Australia–U.S. tax treaty, Australian tax residents can have this reduced to 15%.

• How to get the 15% rate: Stake completes the W-8BEN form for you when you fund your Wall St account for the first time.

• Claiming it at tax time: You can speak to your tax advisor about any applicable offsets you can claim when completing your Australian tax return.

Dividend updates and reversals

Sometimes, the final dividend amount differs from the original announcement.

• Why it happens: Dividend payments may be revised due to regulatory updates, currency adjustments or corrections.

• What is a reversal? A rare case where a dividend is taken back and reissued with the correct amount.

• How to check: Your Stake transaction history will show the gross amount, tax deductions, and any adjustments or reversals.

ADRs (American Depositary Receipts) and fees

ADRs represent foreign companies trading on U.S. exchanges – and they can carry extra fees and taxes.

• Depositary fees: A small amount (e.g. US$0.01–US$0.05 per share) is deducted by the U.S. bank managing the ADR. This comes out of your dividend before it’s credited.

• Extra foreign taxes: The foreign company may also withhold tax before the dividend reaches the U.S. This can result in more total tax being deducted than the usual 15%.

• FX impact: Dividends are paid in USD, so when converted to AUD, the exchange rate can affect the final amount received. This isn’t a fee – just currency movement.

If you're ever unsure about a dividend payment, you can check your transaction history in the app or reach out to the share registry for more details.

Disclaimer: Due to the complexities of U.S. and Australian tax laws, we recommend seeking independent, professional advice tailored to your personal situation. This article is provided as general information only.