In this episode, I am joined by Financial Planner, Aravind, for a deep dive into one of the most common (and misunderstood) questions for incorporated business owners: Should I pay myself a salary or a dividend?
We unpack the myths, explore the tax mechanics, and walk through real-life planning considerations that go far beyond the coffee shop advice of “dividends are better.” Spoiler alert: the answer is almost always “it depends"!
Our conversation included:
- The concept of tax integration and why it matters
- Why CPP is not the villain it is sometimes made out to be
- How your business lifecycle affects compensation strategy
- What notional accounts are and why you should care
- The impact of salary on disability insurance, mortgage applications, and more
- Why dividends can be a powerful tool especially when cleaning up corporate tax accounts
- The importance of annual planning with your accountant and financial planner
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