What is the best compensation method? Salaries and dividends each have their advantages and their disadvantages.
- Additional company expenditures.
- RRSP, QPP, QPIP contributions.
- Childcare expense deduction at the federal level
- Minimum social contributions.
- In case of divorce, since there are no RRSP or QPP contributions, dividends are excluded from the family patrimony.
- No RRSP, QPP or QPIP contributions, so lower benefits from these plans.
Your Advisor can recommend the optimal solution (salary and/or dividends) to cover your annual living expenses.