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  • May 17th, 2006 3:40 pm
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[OP]
Deal Addict
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Mar 27, 2003
3348 posts
86 upvotes

CPP/EI Deductions

Ok, so I own a business with two partners and we are incorporated. Should we be paying outselves for time worked, or should we be getting paid by a dividend through the company?

Also, since all 3 partners still has their normal job (in addition to the business), and is maxing out their CPP and EI insurnace, do you still have to deduct it from our pay? With the two jobs, it would definately us over the CPP and EI limits.

Please help, if you own an incorporated business.. how do you pay yourself??

Thanks,
Blunt
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4 replies
Deal Fanatic
Feb 1, 2006
9543 posts
689 upvotes
Muskoka
You would really need to speak to an accountant on this one, you need someone to review all the details and advise whether salary or dividends would best in your situation.
[OP]
Deal Addict
User avatar
Mar 27, 2003
3348 posts
86 upvotes
I will be speaking to an accountant soon...
can someone relate what they do in this situation?
I just want to get some idea.
The RFD Doctrine -
Toronto : Anywhere west of Montreal and east of Calgary.
Scarborough: Anywhere becomes Scarborough if it's a thread about crime.
UrbanPoet: Automatic 1-Star thread starter.
Google: RFD is faster than Google. Make a thread if you need to find out what bus to take.
Newbie
Mar 9, 2006
46 posts
3 upvotes
As stated by Bullseye you really should speak to an accountant. There's not enough information to provide you with a reliable response. However, if you just want to get an idea then here's my take on it. If you pay yourself salary you will need to take into consideration your current salary so that you pay the appropriate amount of taxes. Paying yourself a salary will give you more RRSP room. If you take dividends, it's less admin work and it will not save you any money. Basically the amount of dividend you take will make up for your personal tax amount.

Hope that gives you the 'idea' you were looking for. :)
[OP]
Deal Addict
User avatar
Mar 27, 2003
3348 posts
86 upvotes
Sounds good.. thanxs.
The RFD Doctrine -
Toronto : Anywhere west of Montreal and east of Calgary.
Scarborough: Anywhere becomes Scarborough if it's a thread about crime.
UrbanPoet: Automatic 1-Star thread starter.
Google: RFD is faster than Google. Make a thread if you need to find out what bus to take.

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