ARTICLE · 27 MARCH 2017

Handle Owner-Manager Compensation With Care

KPK Law LLP

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As we enter tax filing season next month, owners of businesses will need to finalize the amount and nature of their compensation.

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As we enter tax filing season next month, owners of businesses will need to finalize the amount and nature of their compensation.

Proper documentation and tax planning are the keys to avoiding disputes with the Canada Revenue Agency (CRA). This is all the more so with owner-manager corporate compensation, for which there are both corporate and personal tax considerations.

The objective of owner-manager compensation is to balance the corporation's cash needs with the optimum tax consequences of the manner of corporate payouts. This requires consideration of deductions and credits available to individuals, earned income requirements for deferred retirement plans, and tax minimization of corporate taxes.

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