💡 Daily Tax Tip · #JCOTaxTips

Salary or Dividends? Paying Yourself from Your Own Corporation

By Jeremy Ortega · JCO Bookkeeping Firm ·

Salary or Dividends? Paying Yourself from Your Own Corporation — JCO tax tip card

Your corporation made money — congratulations! Now, how do you pay yourself: salary or dividends?

Salary creates RRSP room, because it counts as earned income. It is also a deductible expense for your corporation, and it comes with CPP contributions (both the employee and employer share) and regular payroll remittances.

Dividends are simpler, with no CPP — but they create no RRSP room and are not deductible to the corporation. Many owners use a mix of both; the right blend depends on your income, your province and your retirement plans.

Follow JCO Bookkeeping Firm for daily tax tips! 🇨🇦 #JCOTaxTips

📌 General info only — every situation is different. JCO Bookkeeping Firm is a Philippine practice since 2021, introducing its brand ahead of a future Canadian opening — Coming Soon to Canada. Not yet accepting Canadian clients.

← All daily tax tips · Free bookkeeping blog