Glossary
Salary vs dividends
Owner-managers of a corporation can pay themselves with salary, dividends, or a blend of both, and the choice shapes their personal tax, retirement savings and payroll obligations. Salary is deductible to the company and builds RRSP room and CPP, while dividends skip payroll deductions but carry a dividend tax credit in your hands. There is no single right answer; it depends on cash needs, other income and long-term goals. Our salary versus dividends guide works through the trade-offs.
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