If you want to earn a tax-free monthly income of €250, you need to understand that this is a long process. Fortunately, there is a way to use the TFSA and make this possible. Maximize the annual limits as much as possible and make dividend investments.
Assuming the annual limit is set at $7,000, it would take 7.5 years ($52,500) to achieve your goal, provided the dividend yield is at least 6%. It can be one share every year, or several shares that pay dividends monthly. The power of compounding works best when you can reinvest dividends twelve times a year.
Quick service restaurant
Only a few TSX companies pay monthly dividends. Pizza Pizza Royalty (TSX:PZA) in the quick service restaurant sector stands out for its strong yield of 6.38%. This $482.6 million royalty company owns the valuable trademarks and trade names used by Pizza Pizza Limited (PPL) and its subsidiary Pizza 73. Stock performance has been relatively stable for most of the year. SGR.UN trades at $14.57 per share and pays a mouth-watering 8.15% dividend.
The royalty model and high profit margins from the royalty pool ensure that Pizza Pizza can maintain its monthly payout. Based on a 20-year dividend track record, this small-cap stock is suitable for long-term investors in the TFSA. Furthermore, PZA’s track record in dividends spans two decades. It has not missed a payout since July 2005.
In the third quarter (Q3) of 2025, total system sales and royalty revenue increased 1.9% and 2% year-over-year, respectively, to $158.8 million and $10.2 million compared to Q3 2024. The total number of restaurants in the royalty pool increased to 794 after adding 20 stores this year.
Paul Goddard, President and CEO of Pizza Pizza Limited, points to increased competition in the QSR category. “We are responding by investing in digital ordering, improving the speed of service and delivering compelling new offerings that will differentiate our brand and drive growth,” he said.
Goddard assured that it has been the company’s policy to distribute all available cash to maximize shareholder returns over time.
Supermarket-anchored REIT
Real estate investment trusts (REITs) are alternatives to owning real estate. However, Slate grocer (TSX:SGR.UN) focuses on the commercial sector in key US markets. The $881.8 million REIT owns properties anchored in grocery stores. If you invest today, the stock price is $14.88, while the dividend yield is 8.15%.
Two of the largest tenants are Walmart And Crochet. Fortunately, the e-commerce boom did not materially impact the operations of the REIT’s grocery and essentials tenants. Slate charges a rental price that is below market price.
In the third quarter of 2025, net income rose 55% year-over-year to $11.2 million compared to the third quarter of 2024. According to CEO Blair Welch, it was another quarter of strong results. “Given the complex macroeconomic environment, consumer spending on groceries and essential goods remains resilient,” he said.
Productive income providers
Pizza Pizza and Slate Grocery REIT are small-cap stocks, but are prolific providers of passive income. You can also accumulate shares or distribute your TFSA limits equally among these shares.
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