Salary vs. Dividends Optimizer

This free calculator is built for Ontario incorporated small business owners who pay themselves out of their corporation. Enter your corporate net income and the cash you need to live on this year, and the tool models three scenarios — all salary, all dividends, and an optimized mix — showing the total tax bill and take-home pay for each. It uses 2025 Ontario personal tax brackets and the federal small business corporate rate.

Salary is compensation paid to you as an employee of your corporation. It creates RRSP contribution room, generates CPP benefits, and is deductible for the corporation, but it triggers payroll taxes on both sides. Dividends are paid from after-tax corporate profits, so they skip payroll taxes and are simpler to administer, but they don't build RRSP room. Most incorporated owners end up somewhere between the two — and the "right" split shifts every year as tax rates and your income needs change. That's why running the numbers matters.

Want a personal review of the assumptions and how they apply to your business? See tax planning services or book a free 30-minute call.