Helping business owners weigh the salary vs dividend dilemma

Wealth Professional
March 6, 2023.

For many business owners and incorporated professionals, the choice between taking compensation from their corporations through dividends or a salary is a tax-planning dilemma. And for two top financial advisors, it’s a question that gets revisited every year.

“Most of our clients are incorporated, whether they’re a doctor, a dentist, a business owner, or even an IT consultant,” says Andrew Feindel (pictured above, left), portfolio manager and investment advisor at Richie Feindel Wealth Management with Richardson Wealth. “I revisit [the salary vs. dividends decision] every year, sometimes even more frequently, and the truth is it’s dynamic.”

Roughly speaking, Feindel says the incorporated clients he and his partner Kyle Richie (above, right) work with can be segmented into three categories: those who take 100% dividends; those who take a salary of roughly $66,600, which lets them maximize their CPP contributions; and those with salaries of about $175,000, which maximizes their RRSP contributions based on 2023 limits.

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