Salary vs dividends
Definition
The choice every 1-person corp owner makes: pay yourself via a T4 salary (creates RRSP room, CPP) or non-eligible dividend (no payroll admin, no CPP).
Long reference
Handbook
Salary vs. Dividends
Citations, procedures, and worked examples for salary vs dividends.
Related terms
T4 slip
The slip issued by an employer showing annual employment income and source deductions for a calendar year. Filed by February 28 of the following year.
Shareholder loan
A loan from a shareholder to their corporation (or vice versa). Under ITA 15(2), an unpaid loan from the corporation to the shareholder is added to the shareholder's income if not repaid within one fiscal year.