The salary vs. dividends debate has taken a big change this year for Quebec business owners. Many of you will be paying about 4% more in corporate taxes. If your employees (including yourself) will not work a total of more than 5500 hours combined, your taxes may be going up.
Even if you are not affected by this new twist which was announced in the March 2016 provincial budget, you still need to know the best mix of salary and dividends.
Unfortunately, many accountants are still giving the standard "pay yourself a salary enough to make an RRSP contribution and to contribute into the Quebec Pension Plan (CPP) and take the rest of your compensation via dividends"
In many cases this is wrong. Quite a few business owners will find it better to take only salary and some will find dividends are the best route but there is no "one answer fits all".
I use a tool for my clients at the beginning of EVERY year to determine what their optimal mix should be. It takes into account everything that is needed to find out what is best for your situation.
This year, I am offering a personal report to only 15 business owners (it takes a lot of time to run many scenarios…) who are not my clients. I am aware that many of us are not certain how to pay themselves and as I mentioned above, accountants tend to overgeneralise and use compensation strategies that are outdated.
There is only 5 questions that I ask (one of them being how much money you will need to cover yours and your family's expenses this year). Once I get the info, I can run scenarios to see which mix would be best for you, and then send you the report, no obligations.
If you are interested, get back to me very soon.
All the best for the New Year and let's do our best to avoid getting screwed by overpaying our taxes again.
