And now the fun part: reaping the well-deserved rewards from your incorporated business via yummy cash.
When it comes to paying yourself as a corporation, it comes down to this: Salary and dividends.
Salary* more expensive option
- Add yourself to the company payroll and receive a T4
- Company will have to pay payroll taxes on your behalf
- Accumulate more room in your RRSPs to save on personal taxes
- Get a bookkeeper to figure out how much money you took from the business
- Your accountant will declare the money you have taken from the company as a dividend
- Get your accountant to issue a T5 from the corporation
- You cannot be a contractor to your own corporation because the Canada Revenue Agency (CRA) is missing out on taxes.