Pay yourself the least possible amount you can live on. You can use lots of tricks to take the money out later, but until you smooth out the month to month variations, your company can probably use the money better than you can.
Thanks that helps..A bonus is considered a one-time deal that has no continuing effect on your year-end total taxable income. When you add the bonus amount to regular wages the cmpt thinks that your wages will continue at that level for the rest of the year --- pushing you into a higher tax bracket ---- so more tax is withheld.
Call each of your cash draws bonuses with no salary. That way each is considered separately.
How much $$ you need to leave in the business depends on what kind of ongoing costs it has during the lean times.
The govt wants their money as you make it. They're greedy little buggers. Their calculator will wring everything out of you asap, without looking at the "big picture".Thanks that helps..
I'm still a little confused though.. The salary + bonus method is taxed lower than just the salary method.. what do you mean by "continuing effect"?
If a bonus is not affected by tax brackets, why doesn't everyone just pay themselves in bonuses bi-weekly rather than in salary.. or is that what most corp owners already do?
EI was in my postIf you own the corp (I believe 40% or more of the controlling shares - I don't have letters after my name) you are EI exempt.
Self employed people (sole-props) cannot opt out. You have to pay both the employee and employer portion of CPP.I know that if you are a sole proprietor you can opt out of CPP, but I am not sure if you can do that under a corporation.