Salary vs dividend calculator
If you own an incorporated business, every dollar of profit reaches you one of two ways: as salary the company deducts, or as a dividend paid from what’s left after corporate tax. The system is designed so the total tax comes out roughly the same — but only roughly, and only before CPP and RRSP room. This runs every mix from all-salary to all-dividend for your province.
The company and you
Every mix, from all salary to all dividend
Cash in hand after every tax and contribution, plus what each mix buys you.What the numbers don’t show
CPP is not just a cost. Salary triggers CPP on both sides, but every year of contributions raises the pension you collect from 65. Dividends buy none. The table shows CPP separately so you can weigh it yourself.
Salary creates RRSP room at 18% up to the annual limit; dividends create none. If you would actually contribute, that room is worth its deferred tax — the “count RRSP room” switch adds it at your marginal rate.
Owner-managers are usually EI-exempt. If you control more than 40% of the voting shares, EI does not apply to your salary, and it is left out here. Money left in the company is a third option — the planner’s Holding company tab models it.
This is one year. The real decision is thirty.
The full planner carries the company forward — retained earnings, the passive-income grind on the small business limit, refundable tax, the capital dividend account, shareholder loans — and shows what each pay policy does to the family’s net worth over time.