Salary vs Dividend Calculator 2025
Compare taking income as salary vs dividends from your corporation. See which option leaves more money in your pocket.
Your Corporation
Available funds to pay yourself
Enter your corporate profit to compare salary vs dividend options
Salary vs Dividends: Which is Better?
As a Canadian business owner, you can pay yourself through salary, dividends, or a combination. Each has different tax implications and affects your CPP benefits, RRSP room, and overall tax burden.
Salary Benefits
- Creates RRSP contribution room (18% of salary, up to $32,490)
- Builds CPP retirement benefits
- Fully deductible for the corporation
- May help qualify for certain loans and mortgages
Dividend Benefits
- No CPP contributions required (lower immediate cost)
- Dividend tax credit reduces personal tax
- More flexibility in timing of payments
- Can be split with family members (with restrictions)
Tax Integration
Canada's tax system is designed so that income earned through a corporation and paid as dividends should be taxed similarly to salary income. However, imperfect integration means the optimal choice can vary by province and income level.
Disclaimer: This calculator provides estimates based on 2025 tax rates and assumes your corporation qualifies for the small business deduction. Actual results may vary. Consult a tax professional for personalized advice.