Salary Vs. Dividend: How To Pay Yourself From A Corporation In Canada

Should you pay yourself a salary or dividend from your corporation? This is one of the most asked questions by many of my real estate investor and small business owner clients.

When you own your business or properties inside a corporation, there’s always a tax impact when you take the money out from the corporation.

There are two common ways to do so – one is by way of salary, and the other is dividend.
The difference between the two is that salary is a deductible expense, while a dividend is not.

Personally, I started off paying myself all dividends in the early days. Nowadays, I pay myself a combination of dividends and salary.

The truth is, there is no one size fits all solution.

In this video, I explain in-depth the financial and tax implications of paying yourself a salary or a dividend from a corporation using easy-to-understand examples. I also talk about the different attributes of dividend and salary so you can make the best decision for yourself.

Towards the end of this video, I share a strategy that many accountants use to accrue the salary and then later pay the salary out to the personal side and then pay the personal income tax later.

Please make sure to speak to a professional accountant that knows your personal situation before making a decision.

If you need to talk to one of the accountants on my team, send us an email at [email protected]

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If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.

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DISCLAIMER:

Real estate Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your own legal and tax advisors to ensure you get the best advice personalized for you.
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