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How to use this Salary vs. Dividend Calculator
This calculator compares the total immediate tax and statutory cost of paying yourself from a Canadian corporation as salary versus an ineligible dividend. It combines corporate tax, personal tax, and CPP to show which method results in lower overall cash leakage for a given year.
Step 1 — Enter your personal details
- Taxpayer name: For reporting and PDF output.
- Tax year: Select the year to apply correct CPP and rate assumptions.
- Province of residence: Determines personal and corporate tax rates.
Step 2 — Enter your current income
- Existing taxable income: Your current personal income before this decision.
- This is critical for correctly calculating marginal tax and CPP.
Step 3 — Enter the additional amount
- Additional amount: The amount you plan to pay as either salary or dividend.
- This amount is compared under both methods.
Optional — Corporate income
- Corporate taxable income: Used to refine the corporate tax rate if needed.
- If left blank, the calculator assumes the small business rate.
How the results are calculated
- Salary option: Includes personal tax + employee CPP + employer CPP.
- Dividend option: Includes corporate tax + personal dividend tax (no CPP).
- Total leakage: Combined corporate and personal cost for each method.
- The calculator highlights which option produces the lower immediate tax cost.
Interpreting the result
The recommended option is based on immediate tax cost only. Long-term integration, RRSP room, and retirement planning are not reflected here.
Export & sharing
Use Copy Results or Download PDF to save or share with your accountant or advisor.
Important limitations
This tool compares ineligible dividends only and does not consider long-term tax integration, capital dividends, or estate planning.