Salary vs Dividend Calculator
Owner-managers of a Canadian-controlled private corporation can pay themselves a salary, dividends, or a mix. This calculator compares the after-tax cash from each route for 2026, holding the pre-tax corporate dollars constant. The salary path accounts for employer CPP and the fact that owner-managers are exempt from EI; the dividend path applies small-business corporate tax first, then the non-eligible dividend gross-up and dividend tax credit.
Estimate only for the 2026 tax year. Not tax, accounting or financial advice. Talk to RN Canada about your situation.
Frequently asked questions
It depends. Salary creates RRSP room and CPP benefits but triggers CPP contributions; dividends avoid CPP but build no RRSP room. This calculator shows the after-tax cash for each so you can compare for Alberta or BC.
Generally no. A shareholder who controls more than 40% of the corporation's voting shares is not insurable, so no EI is paid on that salary. The calculator reflects this.
Dividends are paid from after-tax corporate profit, so the corporation pays its small-business tax (11% in Alberta and BC) first, then distributes the remainder as a dividend.