Free calculator · 2026 rates

Salary vs. Dividend Calculator for Ontario Owners

Owner-managers can pay themselves salary, dividends or both. Compare the after-tax cash, total tax, CPP and RRSP room for each approach.

Most cash in your pocket

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$0 after all taxes and CPP

All salary

Mix

All dividends

Breakdown	All salary	Mix	All dividends
Salary	$0	$0	$0
Dividends	$0	$0	$0
Corporate tax	$0	$0	$0
Personal tax	$0	$0	$0
CPP (employer + employee)	$0	$0	$0
RRSP room created	$0	$0	$0
Total tax	$0	$0	$0

Assumes no other personal income and that you hold more than 40% of the voting shares (EI-exempt). CPP contributions also buy future pension benefits, which are not valued here. Ask us to model your actual mix.

How this calculator works

Salary is deductible to the corporation; employer and employee CPP and CPP2 apply. Owners with more than 40% of voting shares are assumed EI-exempt.
Dividends are paid from profits taxed at the small business rate you choose and are taxed personally as non-eligible dividends.
The “mix” pays salary up to the CPP2 ceiling ($85,000) and the rest as dividends. Assumes no other personal income.

Important

Results are estimates for general information, based on 2026 federal and Ontario figures verified October 27, 2026. Federal Budget 2026 (November 5, 2026) may change some amounts. Your actual tax depends on credits, deductions and circumstances not captured here.

Get help with Corporate Tax (T2)

Frequently asked questions

Is salary or dividends better in Ontario?

Neither always wins. Salary builds RRSP room and CPP and lowers corporate tax; dividends avoid CPP and payroll administration. A blend is often best.

Why does the 2027 option matter?

Ontario’s non-eligible dividend tax credit falls on January 1, 2027, raising personal tax on small-business dividends and shifting the balance slightly toward salary.

Does this include the value of CPP benefits?

No. CPP contributions are shown as a cost, but they also fund future retirement benefits, which this comparison does not value.

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