How Do I Pay Myself If I Am Incorporated?
You can pay yourself in a few ways.
You can add yourself to the company payroll and receive a T4.
The company will have to pay all required payroll taxes on your behalf. Owners are exempt from EI but must pay CPP like other employees.
Choosing this option will allow you to accumulate more room in your RRSP’s which you can utilize to save on personal taxes once you are making the big bucks.
Additionally, if you are the lower-income earner and need to deduct child care expenses from your taxable income you will need to pay yourself with a salary.
You can declare the money you have taken from the company as a dividend.
To do this you will need to get your accountant to figure out how much money you took from the business throughout the financial year and issue you with a T5 from the corporation.
Your personal tax rate will be lower than if you take a salary.