Entrepreneurship & Small Business

Dividend vs payroll calculation help

  • Last Updated:
  • Sep 8th, 2018 6:53 am
[OP]
Newbie
May 26, 2018
22 posts
2 upvotes

Dividend vs payroll calculation help

Hello,

Can anyone please help me with calculation of dividends vs payroll. I live in New Brunswick. Me and my spouse will either take same salary or same dividends-

Dividend Scenario

Yearly Revenue- $48000
Dividends for Me- 20,000
Dividends for Spouse- 20,000

Salary Scenario

Yearly Revenue- $48000
Salary for Me- 20,000
Salary for Spouse- 20,000

Thank you
5 replies
Sr. Member
User avatar
Feb 14, 2009
929 posts
306 upvotes
Nbrocks wrote:
Sep 5th, 2018 12:50 pm
On such small amount (if there is no other income) I guess salary is better.
there are several other variables that can contribute to a result:
children, medical expenses, etc....

You can play with numbers here:
https://simpletax.ca/calculator

Cheers!
Member
Nov 12, 2014
339 posts
159 upvotes
Kingston, ON
LOL pay your accountant for that. Jesus. Cheap people.
[OP]
Newbie
May 26, 2018
22 posts
2 upvotes
Thanks, but I couldn't find how much does an employer have to pay for CI and CPP.
Sr. Member
User avatar
Feb 14, 2009
929 posts
306 upvotes
Nbrocks wrote:
Sep 5th, 2018 1:53 pm
Thanks, but I couldn't find how much does an employer have to pay for CI and CPP.
Corporation pays approximately the same as a person.

For amount >50K system is designed to yield approximately the same
in both cases. But for smaller amount effective personal tax is greatly
reduced by "personal deduction". For example for 20K
effective tax is 13-14%. But in dividend case a corporation pays
15-20% flat and then yet another 3-5% on personal side.
(all numbers are approximate, there are several additional variables).

Cheers!
Deal Addict
Aug 28, 2007
1843 posts
242 upvotes
Calgary
I agree with QN5252

However, if you want to see exact expenses for payroll (for employer and employee) just Google CRA PDOC and you'll get the online calculator

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