If you are an incorporated business owner - learning how to pay yourself is a frequent question. However - depending on the phase of life of your business, your fondness of CPP, and the opinion of your accountant - you may get varying answers.

Which is it? Salary or Dividends?

The answer is often "it depends" BUT in an interview with Tax Lawyer Amanda Doucette, TEP on her podcast "The Tax Chick" Aravind and Amanda covered off some of the major themes to think about.

With some of the highlights here - hopefully it motivates you to go listen to the full thing!

Reasons for Salary include:

- RRSP Room

- Opting into CPP

- Ease of showing income for items like Disability insurance and Mortgage applications

- The after tax impact of CPP isn't actually the $8860.20 you think it is but often a lot less due to tax credits and deductions 🤯

Dividends have their place too - especially later on in a corporate lifecycle.

- Cleaning up notional accounts (CDA, RDTOH, ERDTOH)

- Income Splitting in retirement with a spouse (Beware of TOSI)

We cap it off with a discussion about why this makes planning with your Financial Planner and your Accountant and ANNUAL thing and not just something you revisit periodically. Interested in hearing more?

Check out the link below!

You can get it here or wherever most other podcasts are dropped. Additionally if you are an advisor or someone who is more financially inclined - you should definitely subscribe. You'll be sure to learn a lot!
https://overcast.fm/+AAf7NiUY0VA