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Salary vs. Dividends Calculator

Own a corporation? Compare how much cash lands in your pocket when you pay yourself a salary versus dividends, using 2026 rates.

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Assumes active business income within the $500,000 small business limit, paid as a non-eligible dividend, and that this is your only personal income.
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Salary route, net cash{{ fNetSalary }}
Dividend route, net cash{{ fNetDiv }}
RRSP room created (salary)
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CPP contributed (salary)
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Salary costs more today but builds RRSP room and CPP pension. Dividends skip CPP entirely, both the cost and the benefit.
Where {{ fProfit }} of corporate profit ends up
Each route, split into taxes and cash in your pocket.
Canada's tax system is designed so both routes end up close ("integration"). The real decision is rarely the headline number: it's RRSP room, CPP, cash-flow timing, and payroll admin.
Uses 2026 personal brackets, small business corporate rates and non-eligible dividend credits (provincial figures approximate). Owner-managers holding over 40% of voting shares are EI-exempt, so EI is excluded. Estimates only, not tax advice.
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✦ Good To Know

Paying Yourself, Explained

Salary is a corporate deduction: the company pays no tax on it, but you pay full personal tax plus CPP (both the employee and employer halves, since you're both). Dividends come out of after-tax corporate profit: the company pays the small business rate first, then you pay personal tax on the dividend at reduced rates thanks to the dividend tax credit.

The system is built so the two land in roughly the same place. In practice there's usually a gap of a few percent that varies by province and income level, which is what this calculator shows.

On raw cash, dividends often edge out salary because they skip CPP contributions. But that comparison hides what salary buys: RRSP contribution room (18% of salary, up to $33,810 for 2026), CPP retirement pension, disability coverage, and cleaner proof of income for mortgages.

Dividends win on simplicity: no payroll remittances, flexible timing, and no CPP outflow. Owners who value the pension and RRSP room lean salary; owners who invest aggressively inside the corporation often lean dividends.

Yes, and it's the most common answer. A popular pattern: pay enough salary to max CPP pensionable earnings ($74,600 in 2026) or to create the RRSP room you want, then top up with dividends. The right blend shifts year to year with your income needs, the corporation's cash, and program thresholds. This is bread-and-butter planning for us; call (905) 814-0111 and we'll run your numbers properly.

Quite a bit, deliberately: income splitting rules (TOSI), the passive investment income grind on the small business deduction, health spending accounts, bonuses, shareholder loans, and the value of future CPP benefits. All of these can move the answer. Treat the result as a starting point for a conversation, not a decision.

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