Salary vs Dividend Calculator
Own a Canadian corporation and deciding how to pay yourself? Enter how much pre-tax profit you want to take out and see your net cash and total tax under each route — by province, in seconds. No signup, nothing saved.
How it works
- Salary is deductible to your corporation, so it's paid with pre-tax dollars — but you pay personal tax at your marginal rate plus both halves of CPP, and you build RRSP room.
- Dividends are paid from after-tax corporate profit: the corporation pays tax first, then you pay a lower personal rate thanks to the dividend tax credit — with no CPP and no RRSP room.
- Because of tax integration, the two routes are often within a few hundred dollars. The winner — and the size of the gap — shifts with your province, the amount, and your other income.
Frequently asked
Is it better to pay yourself salary or dividends in Canada?
It depends on your province, how much you're taking out, and your other income. Salary is deductible to the corporation and builds CPP and RRSP room; dividends skip CPP (lower cost now, no CPP benefit later) and are paid from after-tax corporate dollars. Because of tax integration the two are often close — this calculator shows the net-cash difference for your numbers so you can see which wins and by how much.
What's the difference between eligible and non-eligible dividends?
Non-eligible dividends are paid from income taxed at the small-business rate (most CCPCs) and carry a smaller gross-up and dividend tax credit. Eligible dividends come from income taxed at the general corporate rate and carry a larger gross-up and credit. The calculator pairs each dividend type with the correct corporate rate so the comparison is apples-to-apples.
Does this account for CPP?
Yes. The salary route includes both halves of CPP (as an owner-manager you pay employee and employer portions), and reports the RRSP room the salary builds. Dividends are not pensionable, so the dividend route has no CPP and no RRSP room.
Is this tax advice?
No — it's a planning estimate for 2026 using published federal and provincial rates. The right salary/dividend mix also depends on things a calculator can't see (income splitting, RRSP/TFSA strategy, cash needs, GRIP balance). Confirm with your accountant before you decide.
Stop guessing at tax time.
LQID is cloud accounting built for Canadian solo owners — it tracks your income, sets aside the CRA's share automatically, and handles CCA, HST, T5s and rentals. This calculator runs on the same tax engine.
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