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.

Salary vs. Ineligible Dividend: Full Tax Cost (Canada)