Tax & Entity Architecture
Salary vs. Dividend Optimization Calculator
Model corporate active business income distributions, mandatory employer/employee CPP remittances, and non-eligible dividend tax credits across Canadian provinces.
$
$
Option AEarned Income
100% T4 Salary Stream
Deductible expense to the corporation; builds CPP pension and RRSP room.
Gross Corporate Salary:$100,000
Employer CPP Remittance:-$4,230
Employee CPP Deducted:-$4,230
Est. Personal Income Tax:-$38,542
New RRSP Room Generated:+$18,000
Net Annual Personal Cash
$57,228
Option BInvestment Income
100% Non-Eligible Dividend
Paid from after-tax corporate profit; zero payroll remittance overhead.
Corporate Tax on Net Profit:-$18,300
Gross Dividend Distributed:$100,000
Mandatory CPP Remittance:$0 (Exempt)
Est. Net Personal Dividend Tax:-$47,748
New RRSP Room Generated:$0
Net Annual Personal Cash
$52,252
Salary yields $4,976 more take-home cash + CPP security.
Note: While dividends often show slightly higher take-home cash at lower brackets due to zero CPP matching, taking a salary creates CPP retirement credits and active RRSP contribution room.