The current slide tells about how can you pay yourself: salary or dividend. Check out about more interesting topics here https://accountingops.ca/

1. HOW TO PAY YOURSELF
FROM PREC?
SALARY VS DIVIDEND
BY LAKSHAY GANDHI CPA, CGA
647-987-4025
SUPPORT@ACCOUNTINGOPS.CA

2. OWNER
MANAGED
BUSINESS
• FLEXIBILITY TO RECEIVE
SALARY OR DIVIDEND OR
A COMBINATION
• LETS FIND OUT WHICH
OPTION IS BETTER WITH
AN EXAMPLE!

3. COMBINED

4. THINGS
TO
CONSIDE
R -
SALARY
Salary is an expense to your corporation- Issue T4
Salary must be reasonable
Payroll tax expenses – higher (CPP and EI)
Monthly/Quarterly compliance for payroll tax remittance
Owner pays personal taxes based on salary received
Eligible for RRSP contributions, help in qualifying for
financing, and deduct childcare expense

5. THINGS
TO
CONSIDE
R -
DIVIDEND
Not an expense on income statement – issue cheque and T5
Dividend is subject to taxes within the corporation
Not subject to reasonability test
No EI, and CPP withholding requirements. Owner looses CPP
benefits for retirement
RRSP Contributions limit = $0
Owner will need to include dividend in personal income

6. DIVIDEND

7. SALARY

8. WHICH ONE IS BETTER?
• MORE OR LESS THE SAME UNDER BOTH. ONLY DIFFERENCE IS CPP
• DIVIDEND ALLOWS YOU GET MORE AFTER TAX MONEY – REINVEST REINVEST
REINVEST!!
• SALARY ALLOWS TO GET MORE FUNDING!

9. THANKS FOR LISTENING
• 647-987-4025
• SUPPORT@ACCOUNTINGOPS.CA