How to Use Your TFSA to Earn $331 Per Month in Tax-Free Income

Using your Tax-Free Savings Account (TFSA) to build a reliable passive income becomes far easier when you focus on high-quality dividend stocks that pay monthly. Because TFSA earnings are completely tax-free, every dollar of dividend income stays in your pocket, making it an ideal account for compounding wealth over time.

Start by defining how much income you want your TFSA to generate. For instance, an annual target of $3,600, equal to $300 per month, would require roughly $90,000 invested at a 4% average yield. Once you know that number, you can begin building a resilient income portfolio with a mix of fundamentally strong dividend payers with sustainable payouts to generate steady income.

With this background, here are two Canadian stocks that pay monthly dividends and offer high and sustainable yields.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) could be a solid addition to your TFSA portfolio to generate tax-free monthly income. The real estate investment trust (REIT) is known for its steady dividend payments regardless of market conditions. It distributes $0.154 per share monthly, yielding about 7%. Notably, it has maintained its payouts in a high-interest-rate environment and amid macro uncertainty, demonstrating the resilience of its operating earnings.

SmartCentres’s reliable monthly distributions are supported by a diversified real estate portfolio, a high-quality tenant base, and consistently strong occupancy. With 197 mixed-use properties located in high-traffic, in-demand areas, SmartCentres maintains robust leasing activity. As of September 30, 2025, the REIT reported an impressive 98.6% occupancy rate, reflecting the solid demand for its assets.

Leasing momentum has been steady throughout 2025, with nearly 394,000 square feet of space filled so far and strong demand for new developments. The REIT has also secured renewals on roughly 85% of leases set to expire in 2025, supported by healthy rent growth of 8.4% for non-anchor tenants and a 99% rent-collection rate.

Backed by solid operations, high-quality tenants, including top retailers, a strong mixed-use development pipeline, and a large land bank, SmartCentres appears well-positioned to maintain its monthly payouts.

Whitecap Resources 

Whitecap Resources (TSX:WCP) is another dependable stock to add to your TFSA portfolio for monthly income. The energy producer pays a monthly dividend of $0.061 per share, yielding about 6.2%.

Since 2013, the company has returned approximately $2.7 billion to investors, supported by a disciplined payout ratio of 20–25% and a long-term plan for 1–3% annual dividend growth.

Whitecap’s focus on operational efficiency and disciplined project selection supports its ability to generate consistent earnings, thereby strengthening the foundation for future payouts. Its recent acquisition of Veren further expands its scale, boosts production capacity, and enhances its portfolio of high-quality assets. With these advantages, Whitecap appears well-positioned to sustain and gradually increase its monthly dividends in the years ahead. Its high yield and reliable payouts make it an appealing option for TFSA investors seeking regular income.

Earn $331 per month in tax-free income

For TFSA investors, SmartCentres REIT and Whitecap Resources are reliable high-yield dividend stocks to generate tax-free monthly income. The table below shows that if you invest $60,000 and split it evenly between the two, the combined dividends could bring in $3,972 per year or roughly $331 each month.