Incorporated
The small-business rate is leverage — not free money.
For CCPC owners: ~12% combined small-business tax as deferral, SBD grind from passive income, and salary vs dividend with RRSP room, CPP, and TOSI made explicit.
| Strategy | Salary | Dividends | RRSP room | Total tax | Net to you |
|---|---|---|---|---|---|
| Non-eligible dividends onlylowest tax | $0 | $72,442 | — | $16,508 | $66,000 |
| Salary = CPP ceiling (YMPE 74,600), rest dividends | $74,600 | $11,918 | $13,428 | $22,174 | $66,000 |
| Salary only | $88,697 | $0 | $15,965 | $22,697 | $66,000 |
| Salary to max RRSP room, rest dividends | $88,697 | $0 | $15,965 | $22,697 | $66,000 |
- Creates $0 RRSP room and pays $0 into CPP — no forced retirement savings, so you must self-fund it.
- Skips CPP premiums entirely, which raises take-home now but lowers your future CPP pension.
- Simplest to administer (no payroll), but the corp bore small-business tax before you were paid.
- Salary set to the CPP ceiling maximises the CPP pension you buy without over-paying salary tax.
- Still creates $13,428 of RRSP room; the rest arrives as lower-tax dividends.
- Retains ~$181,616 of deferred personal tax inside the corp.
- Pays full CPP up to the ceiling — forced savings some owners prefer to avoid.
- Creates the most RRSP room ($15,965) — but only if you actually invest the refund.
- Forces $4,646 of CPP: a guaranteed inflation-indexed pension, yet also a cost you cannot get back.
- No corporate tax deferral: every dollar is pulled out and taxed personally this year.
- Salary maxes RRSP room ($15,965) while dividends top up cash flow with no extra CPP.
- Balances forced CPP savings against flexibility — you still owe CPP on the salary portion.
- Leaves ~$187,996 of deferred personal tax working inside the corp.
- More admin than salary-only (payroll + T5), for a blended tax outcome.
Educational modelling only — not tax advice. Corporate tax, TOSI (income-splitting rules), and RDTOH are complex; confirm any strategy with your accountant.
What to know
Deferral, not a gift
Retaining earnings inside the corp defers personal tax. You still pay when you extract — the question is when and how.
SBD grind
Passive investment income above the threshold shrinks the $500k small-business limit. Model it before you park cash in the corp.
Salary vs dividend
Salary creates RRSP room and CPP; dividends do not. There is no single optimal mix — each option states its trade-offs.
Continue with your numbers
Free, private, and sourced. Start a plan or explore the sample without overwriting your data.
Estimates only — not financial advice. Based on 2026 CRA / Service Canada rules.