Originally Posted by Blackedout95
The ONLY down side is no CPP contribution which I have the discipline to invest my savings for the future much better. On $80k dividend a year with nominal write offs such a $$$$ charity cont. and other expenses you would pay very low $XXXX in tax.
To say a dividend does not work out better defeats the whole opton of a dividend, it is created to save in taxation. It works out better because of my explination above. The corporate tax rate and dividend rate combined are lower than the personal take bracket rate at that level.
Stop making up facts and aggregating the truth. CPP is still deducted from your personal income tax, assuming you are claiming the dividends as income otherwise your committing tax fraud. Dividends are after tax dollars from the corporation, meaning they are already taxed albeit at a lower corporate take rate, when you then add in that it is taxed again as your personal income, it starts to equal out.
I'm not saying there is no benefit, I'm saying it isn't as much as you are making it out to be. If the corporation is making lots of money then yes, if it's making pennies or an average salary, then not so much.
Read this from a more creditable source.
Our personal and corporate income tax structure is as fair as it has ever been. It is what accountants refer to as being “fully integrated”. This means that at the end of the day, whether you pay yourself a salary or a dividend, when you take the income taxes paid at the corporate level and those paid personally, the combined taxes should be the same whether you take all salary, all dividends, or a combination of the two. That being said, nothing in life is perfect and, in almost all cases, there is a discrepancy of one or two percentage points that can work for you or against you and potentially influence your decision on how you compensate yourself.