Salary vs dividend calculator, Ontario.

How the salary and dividend routes are calculated

Both routes start with the same pre-tax corporate income. On the salary route the corporation pays you a salary and its half of CPP, so salary plus employer CPP and CPP2 equals that income, the corporation owes no tax, and you pay income tax on the salary after deducting the enhanced CPP and CPP2 and claiming the base CPP credit. On the dividend route the corporation pays tax at the rate you enter and distributes the rest as a non-eligible dividend. You gross it up by 15% (CRA), pay tax on the grossed-up amount and claim the federal dividend tax credit (9/13 of the gross-up, 9.0301% of the taxable amount) and the Ontario credit (2.9863% of the taxable amount for 2026).

Worked example. $100,000 of income at the default rate: the dividend route pays about $11,700 of corporate tax and distributes about $88,300; the salary route pays roughly $95,350 of salary plus about $4,650 of employer CPP.

What this does not model

Employment Insurance, Employer Health Tax, WSIB, the CRA's tax on split income (TOSI) for family members, the passive income grind on the small business limit, alternative minimum tax, other personal credits, and the effect of salary on mortgage qualification. Ontario's lower corporate rate falls from 3.2% to 2.2% on July 1, 2026, and the Ontario non-eligible dividend tax credit is set to fall to 1.9863% for 2027, so check the 2027 figures before relying on a 2027 comparison.