Owner-managed corporations
Accounting for Owner-Managed Corporations in Ontario
Last reviewed: August 2026
When you own the company and you also run it, the corporate return and your personal return are the same decision taken twice.
Consultants, marketing agencies, photographers and studios, e-commerce, professional services, transport, wholesale and holding companies. Different businesses, same four questions every year.
The pay decision
Salary is deductible to the corporation, creates RRSP room and costs CPP on both sides. Dividends come out of after-tax profit, with neither.
In Ontario the two totals usually land close enough that tax alone does not decide it. What decides it is RRSP room, whether payroll runs anyway, a mortgage application that wants employment income, and whether income splitting is open to you.
The arithmetic
Our salary versus dividend calculator runs both routes on current Ontario rates, then stops. The recommendation needs facts a calculator does not have.
The rates
The 2026 Ontario reference carries the corporate rates, the brackets, the instalment thresholds and the GST/HST tests, each with its source named.
Four things that quietly cost owner-managers money
The shareholder loan
Money moves between owner and company all year and nobody reconciles it until the year end. Under subsection 15(2) the balance lands in your personal income unless it clears within a year of the corporation's year end, and not as part of a series of loans and repayments.
Paying family
A salary to a spouse or adult child has to be reasonable for work actually done. Dividends are a separate question, because TOSI taxes them at the top rate unless an exclusion is met.
Instalments on autopilot
Most are carried forward from a prior year. Grow, and you owe a balance plus interest. Shrink, and you have lent the CRA money. One review a year settles it.
Two firms, one set of facts
Where a bookkeeper does the books and someone else files, the dividend in the corporation, the T5 and the T1 do not always agree. One firm means one number in all three.
What we handle
- Corporate tax (T2), the year-end close, instalments and CRA correspondence
- Personal tax (T1) for the owner and family, matched to what the corporation declared
- Salary versus dividend planning before the year ends, shareholder loan included
- GST/HST, from registration timing through filing and input tax credit review
- Payroll, T4 and T5, including taxable benefits and family payroll
- QuickBooks Online bookkeeping, closed monthly or quarterly
- Advisory on pricing, hiring, equipment and distributions
If your industry has its own rules
Three areas we have gone deeper on
Same work, plus a body of rules that is easy and expensive to get wrong.
Contractors and trades
T5018, holdbacks, HST on progress billings, WSIB.
Accounting for contractorsHealth and wellness clinics
Exempt versus taxable, input tax credit apportionment.
Accounting for clinicsMed spas and cosmetic clinics
Cosmetic versus medical HST, gift cards, injectors.
Accounting for med spasFrequently asked questions
What counts as an owner-managed corporation?
A Canadian-controlled private corporation where the people who own it also run it. The structure matters more than the industry, because it is what puts the corporate return and the owner's personal return on the same set of facts.
Do you only take contractors, clinics and med spas?
No. Those three have their own pages because they carry rules that are easy to get wrong, not because they limit who we take. Consultants, marketing agencies, photographers and studios, e-commerce, professional services, transport, wholesale and holding companies are a large part of the practice.
Should I pay myself a salary or dividends?
It depends on RRSP room, CPP, whether the corporation needs payroll anyway, and how much you are taking out. Our calculator runs the arithmetic both ways. The decision after that is a conversation, because the totals are usually close.
I took money out of the company through the year. Is that a problem?
Only if it is left unresolved. Under subsection 15(2) a shareholder loan is added to your personal income unless it is repaid within one year after the end of the corporation's taxation year in which it was made, and that repayment cannot be part of a series of loans and repayments. A deemed interest benefit applies while the balance is outstanding.
Can I put my spouse or my children on the payroll?
Sometimes. A salary has to be reasonable for work actually performed and look like employment: hours, a rate, real duties. Dividends are separate, because the tax on split income rules apply at the top marginal rate unless an exclusion is met.
Do I have to charge GST/HST?
Once you pass the small supplier threshold, yes. Both tests are set out on our Ontario reference page with the CRA source against each. Some businesses register voluntarily before that point to recover input tax credits on startup costs.
What does it cost?
Fixed monthly plans start at $350 a month, quoted on the call and confirmed in writing before any work starts. Transaction volume, the number of filings and whether payroll runs move the number.
Talk to an accountant who works with owner-managed corporations
Fixed fees quoted up front, whatever the business does.
Guides
Guides for owner-managers
The decisions that come up on almost every owner-managed file, written out in full.
How to pay yourself: salary or dividends
How to pay yourself salary or dividends from an Ontario corporation, the payroll and slip obligations for each, and what should decide the mix.
Read the guideIs incorporation right for your business?
What incorporation gives an Ontario business owner: the small business deduction, tax deferral, limited liability, and the costs that come with it.
Read the guideIncome splitting through reasonable family salaries
How income splitting with family salaries works in Canada after the TOSI rules, what CRA treats as reasonable, and the records you need to support it.
Read the guideTax instalments: how they work for you and for your corporation
How CRA tax instalments work for individuals and for corporations, when each payment is due, and why a CCPC's balance is due long before its T2 return is.
Read the guideOntario cut the small business rate to 2.2%, and the dividend credit is next
Ontario's small business tax rate fell to 2.2% on July 1, 2026. How a straddle year is prorated, and why the 2027 dividend tax credit cut works against it.
Read the guideTax season for owner-managers: what to gather, check and file
A tax season checklist for Ontario owner-managers with a corporation and a personal return: records, deadlines, what to re-check yearly, how to amend.
Read the guide