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    Salary vs Dividend Calculator (Canada 2025)

    Compare three CCPC extraction strategies side by side: all salary, all non-eligible dividends, and the optimal mix (salary to CPP YMPE, balance as dividends). Includes corporate tax under the SBD, CPP, dividend gross-up + DTC, RRSP room, and a per-province integration gap.

    Guidance, not advice. This calculator runs the rules as published, it doesn't assess your circumstances. Your actual tax may be affected by factors it doesn't cover (allowances used elsewhere, reliefs, marriage allowance, scheme-specific adjustments). Always seek financial or tax advice from your accountant, or contact CRA. Read our editorial scope →

    TaxKiln framework

    Salary-Dividend Extraction Curve

    TaxKiln's optimisation analysis for Ltd Co director remuneration — modelling salary-vs-dividend mix against employer NI + employee NI + corporation tax + dividend tax thresholds per income band for the current tax year.

    Your CCPC and income

    2025 tax year — owner-manager extraction

    All salary
    Winner
    All dividends
    Optimal mix
    Corporate income $150,000 $150,000 $150,000
    Corporate tax $0 (deducted) $18,000 $8,960
    Salary / dividends paid $145,570 salary $132,000 dividend $71,300 sal + $65,706 div
    CPP (employer + employee) $8,860 $0 $8,068
    Personal income tax $31,622 $22,729 $25,528
    Net after-tax cash $105,088 $109,271 $103,410
    Total tax (corp + personal) $40,482 $40,729 $42,556
    RRSP room generated $26,203 $0 $12,834
    RRSP value (marginal × room) $9,171 $0 $4,492
    Integration gap vs sole prop −$1,750 −$1,502 +$324

    Integration summary — Nunavut

    Sole-proprietor baseline tax on $150,000 + $0 = $42,232

    All salary: results in $1,750 less total tax than earning the same income as a sole proprietor.

    All dividends: results in $1,502 less total tax than earning the same income as a sole proprietor.

    Optimal mix: results in $324 more total tax than earning the same income as a sole proprietor.

    Assumptions used in this calculation (click to expand)

    What this calculator assumes

    • Canadian-resident owner-manager of a single CCPC; only salary + dividends from that corporation.
    • Not a personal services business (ITA s.125(7) PSB rules — would deny the SBD and most deductions).
    • No student loan repayments unless explicitly toggled.
    • Employer CPP + EI is paid by the corporation; owner-manager is exempt from EI on shares > 40%.
    • Corporation pays federal + provincial corporate tax at the rate appropriate to its income slice before declaring dividends.

    Not included in this calculation

    • Tax-On-Split-Income (TOSI) on dividends to family members (ITA s.120.4).
    • Pension / RRSP contributions as part of the extraction mix.
    • Taxable benefits — company car, personal-use assets (ITA s.6 + s.15).
    • Quebec dual filing (QPP, QPIP, abatement) — provincial selector covers other provinces only.
    • Multiple-shareholder splits or estate-freeze share structures.

    Statutory basis

    • ITA ss.5–8 (employment income)
    • ITA ss.82 + 121 (dividend gross-up and DTC)
    • Canada Pension Plan Act + Employment Insurance Act (CPP / EI)
    • ITA s.125 (Small Business Deduction on retained corporate profit)
    How this is calculated (click to show the formula)

    Total tax cost of extraction

    Total cost = Income tax (federal + provincial on salary, gross-up minus DTC on dividends) + Employee CPP + Employer CPP + Corporate tax on retained profit funding dividends

    The TaxKiln Extraction Curve compares total combined-tax cost across the income band — not just the headline rate at a single threshold. Theory of integration says total cost should be near-neutral across salary vs dividend; in practice provincial spreads create modest preferences.