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Salaries and dividends

What is the best compensation method? Salaries and dividends each have their advantages and their disadvantages.

Advantages Disadvantages
Salaries
  • Additional company expenditures.
  • RRSP, QPP, QPIP contributions.
  • Childcare expense deduction at the federal level
 Social contributions:

  • QPP
  • QPIP
  • CNT
  • CSST
  • HSF
Dividends
  • Minimum social contributions.
  • In case of divorce, since there are no RRSP or QPP contributions, dividends are excluded from the family patrimony.
  • No RRSP, QPP or QPIP contributions, so lower benefits from these plans.

 

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