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Tax Filings Canada provides pocket-friendly, fixed-fee salary versus dividend planning across Canada: the T2 return with full GIFI schedules and every provincial filing that applies, built for incorporated businesses and CCPCs, with payment only after your work is complete.
You share the paperwork; we take it from there.
Every figure in your salary versus dividend planning file is prepared and checked by a person, not just software.
You get the chance to question, correct, and confirm before we proceed.
Filing is handled for you, with confirmation sent when it is complete.
| Factor | Tax Filings Canada | Typical Firm |
|---|---|---|
| Pricing model | Fixed, flat fee | Hourly / unpredictable |
| Payment | Pay after service | Upfront retainer |
| Price match | Yes, on written quotes | Rarely |
| CRA audit support | Included | Billed extra |
| Typical turnaround | 3-5 business days | 2-4 weeks |
The 9% federal small business rate covers the first $500,000 of active business income, with each province layering its own rate on top. We quote salary versus dividend planning as one pocket-friendly fixed price — the budget-friendly alternative to hourly billing.
The pattern in salary versus dividend planning files repeats often enough that a tax preparation specialist can usually tell early on where a file will need work. What follows is that read, written down for Salary Versus Dividend Planning.
Everything in salary versus dividend planning hangs off a single anchor. A CCPC’s T2 is due six months after year-end, but the balance owing is due two months after year-end. For many small CCPCs claiming the small business deduction, the balance is due three months after year-end. Filing on time does not stop interest running on an unpaid balance.
Once that is settled, the next question answers itself less often than clients expect. The 9% federal small business rate applies to the first $500,000 of active business income. That limit is shared across associated corporations rather than available to each of them. Ask what a reviewer will want to see, and the answer sits in this rule: Passive investment income above $50,000 in a year grinds the small business limit down by $5 for every $1 over, eliminating it entirely at $150,000.
The practical upshot is simple: every one of these rules has a version that helps you and a version that costs you, and which one applies depends on choices made before filing. That is precisely the ground a tax preparation specialist covers. Gathering the following ahead of time turns the first salary versus dividend planning conversation from fact-finding into decision-making.
Whatever the file involves, the terms do not change: fixed fee agreed up front, review together before filing, payment after the service.
Providing transparent fixed pricing and high-quality compliance work for your salary versus dividend planning requirements.
Coverage: Standard bookkeeping and salary versus dividend planning preparation.
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Book NowCoverage: Full-service bookkeeping, filings, and CRA compliance support.
Perfect for established small businesses.
Book NowCoverage: Strategic advisory and fractional CFO integration.
Ideal for companies seeking high-growth financial structuring.
Book NowWhy you should partner with Tax Filings Canada Experts for all your salary versus dividend planning needs?
Providing tailored salary versus dividend planning services to ensure compliance and maximize deductions.
Our tax accountants keep your business compliant with federal and provincial tax rules.
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Start with a free, no-obligation consultation to review your business’s financial, tax filing and compliance needs and outline our affordable solutions.
Receive a comprehensive checklist and securely provide the required financial records and documents.
Our tax accountant and accounting experts carefully prepare your filings, identify all applicable deductions and credits, and conduct thorough reviews.
We file your documents electronically with the Canada Revenue Agency (CRA) on time and provide post-filing support.
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See how our expert Salary Versus Dividend Planning tax and accounting services have helped Canadian businesses save money and stay compliant.
Foreign holdings at an incorporated consultancy in Hamilton, Ontario had crossed the reporting threshold unnoticed. Disclosure was brought current and $39,000 recovered.
Foreign holdings at an incorporated consultancy in Hamilton, Ontario had passed the reporting threshold without anyone noticing. Behind the disclosure problem sat a loss year carried forward by default when carrying it back would have produced a refund cheque. We reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company. We claimed the treaty relief and foreign tax credits on the Canadian return and corrected the disclosure position for the open years. The treaty position was accepted and $39,000 was recovered. Reporting is now current and the annual process takes hours rather than weeks.
A franchise operator with three locations in Moncton, New Brunswick was overpaying instalments. The cause was passive investment income that had crossed the $50,000 grind threshold unnoticed. Rebasing them returned $131,000 to the business.
A franchise operator with three locations in Moncton, New Brunswick was paying instalments calculated on a prior year. That year no longer reflected the business. Passive investment income that had crossed the $50,000 grind threshold unnoticed was tying up $131,000 of cash. We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, we modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. $131,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
A second-generation family manufacturer in Surrey, British Columbia had already been penalised. The issue was a distribution treated as tax-free capital dividend with no election ever filed. A relief application cancelled $64,000 of that penalty.
A second-generation family manufacturer in Surrey, British Columbia had already missed one deadline and was about to miss a second. Behind it sat a distribution treated as tax-free capital dividend with no election ever filed. A penalty of $64,000 was accruing. We split the work into what had to happen before the deadline and what could follow it. Then we moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down. The outstanding return was accepted as filed, and the taxpayer relief application cancelled $64,000 of the penalty already assessed on the earlier year.
A professional corporation in Barrie, Ontario needed a holding structure. It had to deal with a balance-due date the owner believed was the same as the filing date. The reorganisation was tax-neutral and removed $46,000 of annual exposure.
The structure at a professional corporation in Barrie, Ontario needed fixing. The file was carrying a balance-due date the owner believed was the same as the filing date. Every option for fixing it ran through a reorganisation that had to be done without triggering tax. We worked with the client's lawyer. Together, we reviewed each capital cost allowance pool and set the claim at the level that kept the small business deduction fully used rather than wasted. We also prepared the elections, resolutions and valuations the structure needed to stand up. The structure now matches the business. Annual saving of $46,000, and the reorganisation itself was tax-neutral.
A holding company and its operating subsidiary in Halifax, Nova Scotia was preparing to sell. However, a minute book with no resolutions behind a decade of dividends disqualified the shares. Purification sheltered $755,000 under the exemption.
A holding company and its operating subsidiary in Halifax, Nova Scotia had an offer on the table and 19 months to close. The shares did not qualify for the capital gains exemption. A minute book with no resolutions behind a decade of dividends was part of the reason. We purified the corporation so the shares met the qualifying tests. We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. All of it was done well ahead of the closing date. The sale closed on schedule with $755,000 sheltered by the lifetime capital gains exemption across the shareholders.
A CCPC with two shareholders in Kelowna, British Columbia was under review. The issue was two corporations under common control filing as if each had its own $500,000 limit. The file closed in 10 weeks with $70,000 of proposed tax cleared.
A CCPC with two shareholders in Kelowna, British Columbia was selected for review. Two corporations under common control filing as if each had its own $500,000 limit had shown up in the CRA's automated matching. The proposed adjustment on salary versus dividend planning came to $70,000. We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. Every figure in the response traced to a source record the auditor could verify without asking a second question. The review closed with no change. $70,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Meet the specialists behind your Salary Versus Dividend Planning filings. Our Partners Are Alumni of the World's Top Accounting and Tax Institutions
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CA. Fractional CFO and Senior Advisory Specialist
Same fixed fees in every province. Find your city or your sector.
Direct answers to what Canadian business owners actually ask before hiring an accountant.
Salary Versus Dividend Planning starts at a fixed fee quoted before any work begins. The quote is locked at the outset and does not change mid-engagement, and you pay only after you have reviewed and approved the deliverable. Compare every plan on our transparent pricing page.
At minimum: prior-year returns and notices of assessment, your bank and credit-card statements for the fiscal period, payroll records if you have employees, and GST/HST filings. We send a checklist tailored to your situation after the free 15-minute call.
Most engagements are completed within 3 to 5 business days once your documents are complete. Catch-up work covering multiple years takes longer, and we tell you the realistic timeline before you commit rather than after.
We respond on your behalf at no extra charge for any return we prepared. Every figure we file is supported by documentation retained in your file, which is what turns a CRA review from a crisis into correspondence. See how our CRA audit representation works.
Yes. Late filing penalties compound at 5% of the balance owing plus 1% per month, so the cost of waiting is real. We prioritise catch-up work and, where eligible, file under the CRA's Voluntary Disclosures Program to reduce penalties.
Yes. We serve clients in every province and territory at the same fixed fees, so your location does not change the price or the service. Browse our coverage across Canada to find your city.
We work across construction, healthcare, e-commerce, professional services, restaurants, real estate, transportation, technology and non-profits, each with its own deduction profile and CRA scrutiny patterns. See all industries we serve.
Software applies the rules you already know about. An experienced tax accountant finds the ones you do not: capital cost allowance timing, the small business deduction threshold, shareholder loan repayment rules, and TOSI exposure on family dividends. The fee is usually smaller than the deductions it surfaces.
Our salary versus dividend planning services include complete filing, compliance management, and strategic advice customized to Canadian tax laws.
You can start by booking a free 15-minute call. We will review your files, provide a fixed quote, and start working immediately.
The honest answer comes down to one rule. A dividend between connected corporations is generally deductible in computing taxable income. However, subsection 55(2) can recharacterise it as a capital gain where it exceeds safe income and no permitted purpose applies. The safe-income analysis belongs before the dividend is paid, not after. That is the part we verify before anything is filed.
Our answer starts where the legislation starts. A CCPC files its T2 within six months of year-end, with the balance due two months after (three where the small business deduction is claimed). The 9% federal small business rate applies to the first $500,000 of active business income. The filing and payment deadlines differ, and interest runs from the payment date. Filing on time while paying late still costs money. From there it is a matter of applying it to your year — and that application, not the rule itself, is where a tax preparation specialist earns the fee.
The questions Canadians actually search on this topic, answered plainly. Browse every question in the Canadian tax answers directory.
As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.
A small business corporation pays the federal small business rate of 9% on its first $500,000 of active business income for 2026, plus the small business rate of the province where it has a permanent establishment. Above that limit, or once the small business deduction has been ground down, the federal general net rate of 15% for 2026 applies. An unincorporated business works differently: the profit goes on the owner's personal return and is taxed at personal marginal rates.
Child support under current rules is neither deductible for the payer nor taxable for the recipient. Spousal support is treated differently: where it is paid as a periodic allowance under a court order or written agreement, the payer deducts it and the recipient reports it as income. Lump sums and property transfers usually do not qualify. Register the order or agreement with the CRA and keep proof of every payment, because the deduction is often reviewed.
There are two federal rates. For 2026, active business income up to $500,000 earned by a Canadian-controlled private corporation is taxed at the federal small business rate of 9%; income above that limit, and the income of corporations that do not qualify, is taxed at the federal general net rate of 15%. Every province adds its own small business and general rate, so your combined rate depends on where the corporation has a permanent establishment. Investment income is taxed under different rules.
For personal income tax, your account number is your social insurance number. For a business it is the nine-digit business number plus the two-letter program identifier and four-digit reference, so corporation tax, GST/HST and payroll each have their own account. Select the matching payment type and the correct tax year or period as well: a payment posted to the wrong program or year leaves the balance you meant to clear still outstanding and still accruing interest.
Businesses are rarely exempt from income tax; what changes is the rate and the credits. A Canadian-controlled private corporation can claim the small business deduction, giving a federal rate of 9% on the first $500,000 of active business income for 2026 instead of the 15% general rate. For GST/HST you can stay unregistered as a small supplier while taxable revenue stays under $30,000, and some supplies are exempt outright. Registered charities follow separate rules.
For sales tax the amount per dollar depends on the province. GST alone is five cents on the dollar in Alberta and the three territories. Ontario charges thirteen cents of HST, Nova Scotia fourteen from 1 April 2025, and New Brunswick, Newfoundland and Labrador and Prince Edward Island fifteen. British Columbia adds seven cents of PST to GST, Saskatchewan six and Manitoba seven of RST, while Quebec's GST and QST together come to just under fifteen cents.
No. A passport application or renewal fee is a personal cost, and personal costs are not deductible even when the trip is for work. There is no credit for it either. A self-employed person cannot put it on the T2125, and an employee cannot claim it as an employment expense. Airfare, accommodation and a portion of meals on a genuine business trip are deductible, and those are the costs to track instead.
The CRA does not report balances or late filing to the credit bureaus, so tax debt on its own does not appear on your credit report. It can reach your credit indirectly. The CRA can register a lien against property, obtain a judgment, garnish wages or divert benefits, and steps like those can become public record. Lenders also ask for filed returns and a notice of assessment, so unfiled years can hold up a mortgage or a loan.
Salary is taxed at graduated federal and provincial rates, and your employer deducts tax at source on every pay along with CPP or QPP contributions and EI premiums. The withholding is only an estimate built from your pay and your TD1 forms, so a bonus, a second job or a mid-year raise can leave you over or under-withheld until you file. Your T4 reports the year's totals and the return trues up the difference.
Personal rate and bracket changes almost always apply from 1 January of the tax year, so 2026 rates apply to income earned in 2026 and show up on the return you file in 2027. Federal 2026 brackets start at 14%. Corporate changes can land mid-year: Ontario's small business rate is 3.2% and falls to 2.2% effective 1 July 2026, and a fiscal year straddling that date is prorated between the two rates.
You owe a balance when the tax withheld or paid during the year came to less than your total tax for the year. Common causes are two employers each applying the basic personal amount, self-employment or rental income with no withholding at all, investment income, RRSP withdrawals taxed at a flat rate, and CPP or OAS with little tax taken off. For the 2025 tax year the balance was due 30 April 2026. Extra withholding or instalments stops it recurring.
Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. He is Big 4 trained, at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia. In 2014 he founded his accounting practice to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
Sources. CRA — Corporations · CRA — Corporation tax rates · Income Tax Act (Justice Laws Website)
