We've all heard the mantra "pay yourself first,"
either in reference to an investing strategy, or making a living as
a business owner. However, most business owners have an additional
concern. They want to know: "How do I to pay myself enough to
maintain a reasonable standard of living, while maximizing the
health of my business?"
Integrating tax management into your remuneration strategy, just
like in your business plan, can help ensure you're working with
the tax system, not letting it work against you.
To keep things simple, examples will be for a business
that's been incorporated. The owner of an incorporated business
can receive a salary, dividends, or a combination thereof. A
corporation is entitled to a lower tax rate — between 11% and
19% depending on the province/territory — on the small
business taxable income threshold of up to $500,000, and a higher
general corporate tax rate — between 25% and 31% depending on
the province/territory — on any income
