Salary Vs. Dividend

As the owner of your small business corporation you have the option of paying yourself a salary or using dividends as compensation. While recent Federal Budget changes have increased the tax rates on dividends, there may still be some advantages to paying dividends over salary. It is important to do an analysis based on your individual circumstances.

  • Income splitting with family members
  • Paying dividends will reduce your income subject to CPP premiums
  • Consider the impact on disability insurance programs
  • Dividends do not create RRSP contribution room but you may use a Holding company as an alternative
  • Earnings in excess of personal cash flow requirements can be left tax deferred at the corporate level

*Insurance based investment solutions are provided through Affinity Financial Group. All other investment solutions are through Affinity Securities / Worldsource Securities Inc.