Accountant for London Ontario businesses

Professional practices and how the owner gets paid

London's economy leans on health care, education and the professional practices attached to them. For an incorporated practitioner the recurring question is not the return itself but how to take money out of the corporation, and that decision is worth more than most tax planning dressed up as clever.

Salary creates RRSP room and CPP contributions and is deductible to the corporation. Dividends do neither but avoid payroll remittances. The right mix depends on what the household needs to draw, what the practice earns and what is left behind. HBT runs it on the actual numbers before the year closes.

What a London engagement covers

How the work begins

1. 1

   Step 1: Look at the whole picture

   Practice earnings and what the household actually draws.

2. 2

   Step 2: Model the options

   Each route costed, before the year closes.

3. 3

   Step 3: Set it and file

   The chosen mix documented and the return filed.

Should an incorporated professional take salary or dividends?

It depends on how much the household needs to draw, what the corporation earns and what stays in it. Salary is deductible to the corporation, creates RRSP contribution room and requires CPP contributions and payroll remittances. Dividends avoid payroll but create no RRSP room. Most practices end up with a mix, and the right one is worked out on actual numbers before the year end rather than after it.