Episode 131: Dividends vs. Salary—Which One’s Secretly Draining Your Wealth?

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Are you tired of feeling uncertain about whether to pay yourself with a salary vs dividends from your incorporated business?

As a Canadian entrepreneur, you want to keep more of your hard-earned money in your pocket, but conflicting advice on how to structure your income can lead to confusion, overlooked tax advantages, and missed opportunities for long-term wealth. This episode dives into the specific salary benchmarks and dividend strategies you need so you can stop second-guessing and start optimizing your personal and corporate finances.

Taking the guesswork out of deciding between salary and dividends can help you address short-term needs like daily expenses and long-term goals like retirement or future expansions. By clarifying which approach fits your unique situation, you’ll ensure you’re not only meeting today’s financial demands but also setting yourself up for a stronger, more secure financial future.

You’ll learn: 

• Discover the exact salary milestones that unlock extra benefits like CPP and RRSP contribution room.
• Uncover when dividends might be more advantageous for your situation to reduce immediate tax headaches.
• Learn proven methods to manage retained earnings so you don’t end up overtaxed in the future.

Hit play now to learn how to keep more money in your hands and less in the government’s.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

 Most Canadian business owners assume that choosing between salaries and dividends is just a matter of tax optimization, but the truth is, it’s a critical decision that impacts everything—from CPP and RRSP contributions to retained earnings, corporate structure, and long-term wealth management. The wrong strategy can stall your net worth growth, limit your passive income, and even delay early retirement. Whether you’re focused on active or passive investing, maximizing capital gains, or leveraging compound interest for financial independence, your approach to tax implications and investment strategies will determine your rate of return and overall financial security. In our latest episode, we break down the smartest way to pay yourself, align with your time horizon, and accelerate your wealth building—so you can optimize your business for F.I.R.E. (Financial Independence, Retire Early) while keeping more of what you earn.

Transcript:

Kyle Pearce: All right, John, we’re going to hop into this episode and we are going to dive right in. We get these questions all the time. Here. Here is something that I’m hearing from clients quite often is that they take a certain amount for a salary or a dividend, but they’re not exactly sure why. And oftentimes they’re wondering like, what’s the difference? Is there a difference? Should I do something differently? And today we want to highlight some scenarios here for you and some sort of

benchmark numbers that you you should be kind of thinking about depending on whether certain aspects are important to you now before we dig in the government actually does try to use what they call integration so that regardless of whatever you do take a salary or a dividend that it should equal out in the long run the reality though is that it is imperfect so

You’re not going to necessarily be able to get it exactly one for one. So what we’re going to look at in this episode is sort of like, all right, I have to take a certain amount of income each year. That’s a lie. Some people maybe don’t need to take an income. Maybe they have enough money outside of the corporate structure that they don’t need to be doing that. But for those who do, we want to be talking about the most efficient ways so that you can get as many bonuses as possible along the journey.

Jon Orr: Yeah, and I think when you’re saying like for those that do, it’s like also making the case for when it makes sense. You want to optimize your situation and that’s why you listen to this particular podcast is because we often share those secret sauce moves. Like what are those secret moves that maybe misunderstood or

or not say presented fully in helping you make decisions to optimize your tax situations, put more money back in your pockets, protect more of your profits. And I think when we think of salary and dividend and going, well, which is the best scenario here? And you’re right, like the integration model is saying like it shouldn’t matter on say tax leakage out, know, whether you’re issuing your dividend versus a salary and you’re the corporate owner.

And then, then there’s also like these competing theories you hear out there saying like, oh, a dividend is gonna make more sense usually, or a salary might make more sense. this is why it’s like, there’s no like hard and fast rule in a way because it will depend on the business owner and what benefit they’re actually looking to achieve. And it can change over time. But I think what we’re gonna do here, what you said, Kyle, is highlight some key numbers, but then also, you know, if you are,

taking a salary or if you are pulling money from your business, we’re gonna help you kind of say where you should lean because we’ve done some math, know, being some math teachers, we dig into the math and we do want to dispel a myth, you know, about that, you know, always one or the other or which one’s better. We’re gonna shed on that and let you in on the secret of like where you should, if you have to take something.

Kyle Pearce: Hmm. I love it. Yeah, I was on a call recently. Name I will not disclose amazing client and a listener. So this person may recognize this comment because I mentioned it on the call and I tried to make sure that I helped them understand what was really happening. But they had said, you know, on the first $40,000 of a dividend that he pays himself, he’s able to take that completely tax free and.

You know, there’s some truth to that, but I think there’s some misconception to that as well. And basically, if you’re taking only $40,000 out, which this person is not by the way, but they had this mindset or this thought that that first 40,000 that there is no tax and there was no tax. And in reality though, when we look to dividends, the dividend has already been taxed at the corporate level.

So if I was to just take around $40,000 out here in Ontario, that is, I know we are very heavily skewed towards the Ontario tax brackets and so forth, but all of our Canadian friends, it’s very, very easy to extrapolate to different provinces. But if you take that 40,000 out, you may not have to pay any tax out of pocket for you personally, or it’s a very, very small amount.

But the reality is that money was already taxed at a corporate level. Whereas if you took that same 40,000 out of the company as a salary throughout the year, the difference would be is that the company wouldn’t be responsible to pay any tax, but I would be taking that on at a personal level. And the reality is, is it’s almost exactly the same tax rate. So if it was in the corporation and it was still…

good for the small business deductions. So we’re talking about under $500,000 of net operating income. That 12.2%, that low tax rate is about what you’re gonna pay at a personal level with salary. So it’s essentially like you’re cashing it in over here and you’re paying it here, or you’re gonna pay over here and you’re gonna get it free out in your pocket. The reality though is since you own the company, you’re at essentially net zero. Now,

I wanna take a moment though to talk about what we’re giving up if we decide to go the dividend route in that scenario. And then we’re gonna kind of build onto some other scenarios. Cause I know a lot of people out there are going, listen, I need more than $40,000 a year or whatever it is. We’re gonna talk about these nuances, but it’s good to start here because when I take that dividend, what I’m giving up, first of all, what I’m getting is convenience, right? It’s very easy to just go, hey, I have a dividend.

I don’t need to set up payroll for a salary. I don’t need to pay CPP. The company has to pay CPP and I have to pay CPP personally. So there is an additional cost, but it’s not really a cost. It’s actually an investment in a pension plan, right? So that’s really important for you to know is that, you know, when, when it costs more out of pocket, you are getting a benefit from that. And I would argue if I am taking amounts of like

you know, 40, 50, maybe even 70,000, which about 70,300, I believe is the highest salary you can take in order to max out your CPP. What you’re actually getting is more financial security down the road, right? Like CPP is not going anywhere. So if I can get that and I can get it for essentially what works out to like a discount comparatively, I’m going to take it. I’m going to take that amount and

The other nuance I get from that salary is I am opening up additional RRSP contribution room. Whether I choose to use it that year or not is another story, but having the opportunity to use it, especially if there is a high income year where it’s maybe it’s forced on me somehow. Maybe I sold some assets. I got a lot of tax that’s gonna be paid. That RRSP could be really, really helpful.

Jon Orr: Well, I think what you bring up here in this first example of thinking about this 40,000 in this myth about like, hey, we’re never going to pay tax or not going to pay tax on this amount. You’re bringing up, I think, where the key numbers that we’re going to highlight here come from. Because you’re saying if you’re going completely dividend in what we mean by that, if you’re going to pull money out of your business for, say, your personal life and you need it personally, should I go dividend or should I go salary? If I go dividend,

You know, I’m giving up the fact that I’m going to be contributing to CPP. I’m going to be opening up RSP room, which ends up being some of these key numbers later on that, you know, okay, that’s the question that comes up. Okay, what is a good number if I want to max CPP, which means like, because we want to optimize like what’s the right move. So sometimes people are like, okay, let’s max salary to maximize CPP and then we can do dividend after that.

or let’s maximize RSP room and then maybe dividend after that, or let’s maximize, you know, you know, the some of these, these other kind of scenarios, because they, they open up these, these, these, these, these great opportunities. And what we’re going to see is because we, did a little bit of the numbers here is that sometimes it’s like paying, you get to pay yourself first in a way, if you, if you move to the salary route. So for example, in this $40,000 that, you know, example that you’ve

You’ve highlighted here as the first one. When we dig the numbers, it’s almost like, OK, so $40,000 going to pay a little bit of personal tax when I go to claim a tax time, that dividend amount on my tax filing. My corporate structure paid almost $5,000, a little bit more than $5,000 tax, which means total tax leakage on that side was like $6,000.

Now if you flip over to the salary route, you know, between your personal tax after issuing a salary of 40,000, you’re paying like, again, close to the same amount, $5,000, but then you’re paying $2,200 on each end of your CPP. So you’re pay $2,200 out of your personal money, but the corporate has to match it. So there’s another $2,200. So that’s total 9,000-ish, you know, dollars now put towards the, you know, towards the

towards the government at that, you know, at that tax time versus your 6,000 on the dividend side. So what I like to look at it though is, is the $3,000 in that scenario that you’re paying extra on the salary side, is it worth it to have the dividend or the RRSP room? Because you actually open up like $7,000 worth of RRSP room. So if you stuffed

You’ve stuffed extra money into the RSP. Like you might be, you might be doing a little bit better, but it’s like still costing you a little bit to have these options. Right? So you have to decide is it worth 3000, but when we scale up, those numbers change pretty good.

Kyle Pearce: Exactly. Like when we’re playing in the, you know, sub $80,000 range and so forth, it’s like, it’s, I almost feels like maybe it isn’t worth it because like relative to the smaller, you know, a larger, smaller number relative to some of these other numbers we’re going to look at here today, you might feel from a percentage standpoint, that is not that beneficial. But one thing I can tell you is that if there’s about a, you know, $3,000

difference out of pocket total round trip on both sides, corporate and personal to get the CPP. Keep in mind that CPP contribution was 2200 from you personally 2200 from the corporation. It’s like $4400 of value that you’re getting for like $3000 like in a way it’s kind of like you got. Yeah, you got kind of like a discount in a way when you think of it that way. Now the RSP room you had mentioned that 7200 like

Jon Orr: getting socked away. Yeah. Right, right. You’re buying it.

Kyle Pearce: because you’re in such a low tax bracket, I would argue like, you you could stuff it and you’re still gonna like save some money, maybe get about $900 back for stuffing 7,200 bucks in. But I would argue like, I would actually probably like save that RSP room for later at this tax bracket, right? Like it just doesn’t really make much difference. So instead of 3000 out of pocket, you’re gonna be around 2000 out of pocket. It’s…

Jon Orr: Right. All right, let’s go higher.

Kyle Pearce: It’s not a significant amount of savings. is savings, but once again, it’s like, I think that RSP room is gonna be more valuable, especially if there is going to be some time down the road that you are going to take out more money out of the corporation, be it salary, dividend or otherwise, right? So let’s move up to the next one. The number that we’re gonna talk about is maxing out CPP. So.

Remember, we could take $71,300. That’s essentially gonna max out your CPP amount. That means you’re gonna pay just south of $4,000 of CPP. Personally, you’re gonna pay $4,000 just south of it corporately as well. So there’s this added cost that’s being sort of baked in here. But at the end of the day, like when we look at the difference, the difference is gonna be about 4,600 bucks, right? So again, you’ve got like,

$7,800 worth of sort of CPP contribution, almost like an investment. But it’s like you only really cost you $4,600 out of pocket in order to maximize CPP, noting that CPP also has a disability portion to it as well, which is just a bonus for incorporated business owners like ourselves, right? We would say it’s not enough disability. If you don’t have disability insurance, you should have disability insurance if you’re not working for some other employer that has a program.

you want to have long-term disability because who knows if you’re the breadwinner of your family or if you’re the key person in your business, you want to make sure disability is taken care of. We do assist our business owner clients with disability if they have that big hole in their armor and their structure there. But the reality is here we look and we go, okay, the 72 or $71,300 of salary. If we take it, it also opens another like

almost $13,000 of RSP room. And now the tax refund gets a little bit better because we’re moving up the bracket. So you could take 12,000, put it in your RSP and get around $3,700 back from tax. And then it makes it feel like about $900 difference between the two. So it’s still like, you’re still kind of in the quote unquote red.

but you’re getting a lot of value because it’s like you’ve now got 12 almost $13,000 of RSP invested and you’ve got like about $7,800 worth of CPP max contribution being done half by the corporation half by you personally.

Jon Orr: Right, so it’s like saying, it worth me paying $895 to go the salary route so that I get those benefits? Because if I go the other side, I get to pocket the money and not have all those benefits, and I get an extra $895 after I pay the corporate tax, after I pay my personal tax on that dividend amount. So it’s one of those, do I want the flexibility to have

have a dividend when I need to have a dividend. This is the nice thing about going the dividend route is like, maybe I don’t need to pull 70,000. Maybe I want to leave it in the corporation. want the retained earnings to grow. I want to make sure that I, you know, I’m, I’m using the, the, the, the corporate structure, the way I intended to use the corporate structure. But if I do need to pull it, you know, these are the things that you want to think about. And that’s around the seatback. That’s the maximum.

amount you would do to maximize and optimize your CPP. All right, let’s move to the next one, Kyle. Let’s jump, I would say let’s jump ahead to the next magic number here. The magic number I think we wanna look at is maximizing RRSP room.

Kyle Pearce: I love it. So maximizing. Well, actually, let’s let’s pause on that because we’re that’s a big jump. That’s going to jump us all the way into the high one hundreds. Let’s first talk about I want to talk about first and foremost before we move into this is if you’re a business owner and you do not need income from your corporation, but you are not taking income from anywhere else. So I’m not talking about side hustlers that

have a T4 job somewhere else and so forth. Like if you have T4 income coming in somewhere else, it might make sense, probably make sense for you to keep more money in the corporation and use a structure in there. Like that part, and there’s nuances, right? So there’s no hard fast here. But if you’re a business owner, you’re like, actually, just have enough money at a personal level, but I’m not actually taking any taxable income. We want you to consider taking some income out.

Right? Like that $40,000 number like should be coming out, right? Because you don’t want to gift the government is zero dollar of tax year or a zero income year, right? Cause like those low brackets are valuable and they never come back, right? I can’t go back in time to take advantage of a low tax bracket this year, right? So we want to make sure that we’re being cautious about that. We don’t want to take too much out if we don’t need it, but we do want to take some out.

so that you’re getting some out, you’re dealing with some of the tax hit now, and then there’s ways that you can take that and you can put it into your RSP, your tax-free savings, or other personal buckets that you might have at your disposal. Now this one right here is a really important number, especially for those who have a business earning active income, but is stretching beyond the first $500,000 of net operating income, okay?

So why I’m talking about this number, it’s about 135, about $135,000 in salary. And we’re gonna be specific about this. If you are earning more than 500,000, and I’m gonna use an easy number here, and let’s pretend it was $630,000 of net operating income in your active business, there is $130,000 sitting there that is due to be taxed in the corporation at the higher,

active rate, which is going to be 26 and a half percent. If you’re here in Ontario, it’s going to vary in different provinces, but it’s a higher rate than the 12.2 % we paid on the first 500,000. So why I think this is important is that if that’s you, and especially if it’s you and you don’t need that much money for lifestyle needs, you have an opportunity to, instead of paying the 26 and a half percent,

in the corporation on the 130 and letting it stay in there, you could take out the 130, 135,000 as a salary. And that will be an expense to your company. Now the company has only earned 500,000 of net operating income. So that means all of the rest of the money is only going to be taxed at the small or the lower small business tax rate of 12.2%. And I’m going to take on the personal taxation at

around an average tax rate of the 26 and a half percent. So this number is gonna vary depending on your province and the tax rate that we’re talking about here, right? But you can see where I’m going and I go, well, if I had to pay that much over here, I might as well pay it over here. And now I’ve created more RSP room, right? So I’ve created, if it’s 130, it’s gonna give you about 23,000 of RSP room. Let’s call it.

$25,000 of RSP room if you took 135, so to speak. And that would allow you, if you don’t need it all for personal income, you could take that extra money, stuff the RSP to essentially get that 26.5 % back into your personal pocket, right? So even though in the past we’ve talked about how we don’t wanna overstuff RSPs with no plan and…

you know, no reason and then get ourselves in a position where now the money’s all trapped in the RSP and we can’t get it out without high taxation. But we do want to be thinking about like, how do I use these tax rates in the corporation and in my personal life so that I can try to offset things and just kind of tilt the table a little bit more towards in favor of me personally, then say letting that opportunity sort of slip. And if I took that one 30 out,

or even 100,000 out as a dividend, you’ve now lost that RSP room and you’ve also lost that expense to the corporation, right? So now you’re in a position. Now, mind you, it’s gonna come to you at a lower tax rate because the tax rate paid in the corporation was much higher, but in my opinion, you’ve sort of given up a nice, easy opportunity to essentially diversify your different investment buckets.

Jon Orr: Yeah. So to restate why this 130 ish is a magic number is what you’re saying, Kyle, is that the 130 ish on the salary side, your personal average tax rate, your personal tax is going to be equivalent to what would have been the new tax rate if you were making over $500,000 in your business. And it’s like, why not skim off the top here?

move it into your personal side so you can stuff your RSP or create room and optimize that CPP. You’ll have maxed it out. then you’re playing the best of both worlds here in terms of having sure that that rate, if you’re going to pay the 26.2%, 26 and 1.5 % anyway, might as well get it out of there.

Kyle Pearce: 26 and a half percent.

Jon Orr: as long as it’s something that you want to do. And for us, this is one of the strategies, you know, we’re using in our business. And we don’t necessarily need say that level of salary, which is why one of our strategies is to completely stuff the RSP room, you know, and then get that extra bonus there.

Kyle Pearce: Yeah, and I look at it as hey, if I if I end up with a really big RSP, because it’s sort of like made sense to do it, not because like I, you know, was aimlessly over stuffing it. But if it’s like, hey, that money was going to be trapped in the corporation, or I could have some in this essentially tax deferred bucket that I don’t have to worry about capital gains, taxes or anything. Now, keep in mind, all the capital gains will be eventually taxed at whatever your income rate is, there’s those negatives, don’t get me wrong. But

I’m not talking about draining your company and putting it all in the RSP. That is not what we’re after. We’re just looking for ways that we can easily optimize, right? Like this seems like a nice, easy thing that I can do. And the beautiful part is, is that by not going all in on any one strategy, it’s sort of just, it just gives you this level of like confidence that it’s like, I’ve got, I’ve got opportunities and options. And that’s what we always talk about here is How do we give ourselves the most optionality possible with our different tools?

Jon Orr: And if we compare it back to the other case where remember when we were pulling 70,000 as a salary and it was in it and when we compared the tax leakage with the CPP contribution, with the RSP stuffing, remember that we were paying 895 for the opportunity to have that if we compared it to say the dividend. was costing us in a way an extra 895 in tax.

to do that. But when you look at it at this level, so at the 130 level, if you compare the same type of scenario, if we look at the personal tax on the dividend side, the corporate tax, we factor that in, we compare it back to the salary, the personal tax, the CPP contributions you’re going to make. Let’s say we don’t even worry about stuffing the RRSP. What happens here though, is that you end up being slightly better off.

if you go salary, which means you’re saving more in tax on the salary. Even when you’re stuffing, even when you pay the CPP, even when you’re doing some of those other things, it’s all of a sudden, you went from one scenario where like, okay, I’ll go this route because it’s worth it. But now it’s like, it’s really worth it because you’re getting paid to do that.

Kyle Pearce: Yeah, exactly. you know, there’s a lot of ideas out there. And even in earlier episodes, you know, way back at the beginning of our show, like where we talked about, hey, you know, somewhere around this 90 to $100,000 mark was like, hey, we encourage a salary after that, maybe a dividend. And really the idea behind that is like, if you don’t need this money,

for lifestyle and if you were still earning at this, you under the small business tax credit, right? So if you’re already, if you’re under the $500,000 mark, that can make sense because then you’re not unnecessarily taking more money out than you need. And we can do deferral strategies inside the corporation. But as your net operating income grows, if your company is gonna be paying out this higher tax bracket, this could be really helpful. And what ends up happening is the tables start to shift where, as we mentioned that,

the integration of the dividend versus the salary that the government’s trying to do, it’s not perfect. And basically what we started to see in all of our calculations when we actually did the gross up and we did all of these things, just looking at the first $500,000 of earned income in a business, what we start to see is that the higher the amount of money that you need in your personal life, the better off a salary starts looking on paper.

not just because of the bonuses, as you mentioned, but actually that you’re actually getting a slight benefit from a tax perspective at the salary level. Now, when I layer on the RSP benefits, right? So for example, at that 130 mark, we calculated, you know, 23 and change. So almost, you know, $23,400 of RSP room. If you maximize that amount, you’re gonna get like almost $9,000 back.

of that 23 back into your life that you could put in your tax free savings account. You can start funding that permanent insurance policy, whatever it is that you want to do. You could lend it back to the company if you really wanted to, right? You get to decide, but really what we’re trying to do is go, okay, how do we get the most bang for our buck when we know how much money we need for lifestyle and how do we work around that? So

The next number that we’re gonna dig into, and John, had sort of prefaced it a little earlier, is like the maximum contribution amount that we can get in our RRSP is 18 % of your earned income, not a dividend, but a salary or other income of that sort. You can get that up to $180,500. That’s the maximum amount that we can contribute because that gives us essentially,

around 32,000 or so or 31 and change thousand of RSP room. That’s like the cap that we have at least for 2025, right? It slowly goes up each year. But the reality is, is that if you were spending or aiming to spend around 150 or you needed 150, say for lifestyle, now that’s pre-tax dollars. And if we were to take that 150 as salary, it’s like it’s almost in my world. go, if I,

Jon Orr: That’s the cap. Right.

Kyle Pearce: If I’m gonna need that for spending, I’m gonna push up. If there’s money in my corporation, I’m gonna try to push up so I can at least take advantage of this RRSP contribution room. And I might even consider, because we’re getting to a higher tax rate, a higher marginal rate, I might consider taking that extra money and throwing it into the RRSP. Again, taking some money each year to get it over here. There’s still likely gonna be a significant amount in the corporation. that we’re going to want to strategize and utilize some of these other structures with as well.

Jon Orr: Yeah, I like this. I like this option if I think you phrased it very well in the sense of saying if I don’t need 180, but I’m somewhere within the 30,000 there, then let’s pull 180 as a salary and then let’s move a good chunk of that into the RSP to capitalize on the RSP because if I because in a way you’re paying yourself and all of sudden you get this tax refund and that’s the most tax refund you’re going to get at that level.

It’s in a way kind of a no-brainer, you know, if that’s, if you’re kind of close at like, we do want to preface, like if you don’t need $150,000 to live, then, you know, I would be making sure that it stays up in the corporation at that point. Like if you only need to pull it, this is what the scenarios we’re looking at versus a dividend, right? Like you’re to go salary to get that benefit versus a dividend at that level. That’s kind of a…

a nice secret sauce, you know, number to kind of look for is to look at that next number of being $180,000 ish to try to maximize.

Kyle Pearce: Yeah, and you know, and then it brings you to OK, if I’ve if I’m thinking about how much money I need for lifestyle, I would argue that one of two things is happening either. You don’t need a lot of money for lifestyle, so that might limit how much you’re going to want to take out, especially if you’re earning less than 500,000 in the corporation. So that might mean having a lot of retained earnings stuck in the corporations, you know, supposedly stuck in the corporation. And the first natural step for people is to.

put it right into investments. And that’s great. Like definitely right mindset to have. However, that’s where we start to get into some more of these structures that we’ve talked about on some of the past shows. So this is where permanent insurance sort of comes in. Even if you’re taking a little bit at a personal level, but you’re leaving some money. Now, some people say like, what is a lot of money?

Some people start policies where they put $12,000 of corporate dollars into the policy to start building up a tax-free bucket. It’s very conservative, so we’re not talking about Nvidia, although I’m gonna record an episode about Nvidia, all you Nvidia holders. This is why we don’t like holding single shares, because the best stock in the universe just went down like 20 % this past week. But we’ve got a conservative bucket here.

that can be leveraged and utilized. And of course, down the road, the death benefit, the net death benefit is paid out tax free to shareholders through the capital dividend account. Now, for those of you that are taking larger salaries or larger dividends, if maybe that’s how you’ve been doing it in the past, maybe this will shift your thinking today, there are ways that we can incorporate leveraged insurance strategies so that you don’t have to take

as large of a salary. All right. So if you are, was speaking to someone who was taking $400,000. Why? Because they needed more than $200,000 after tax of essentially income to live off of. Well, there are more efficient ways for us to do this. We’re not suggesting that you’re going to take $0 of salary, but by us properly structuring a high early cash value policy inside of your corporation,

we can use Smith maneuver like strategies that are compliant, but also leave you paying way less tax at a personal level now, but also don’t just defer tax later because that death benefit down the road is actually going to turn into a much larger number that comes out tax free to deal with some of these strategies. So.

We’re not going to get into the weeds here on this particular episode, but I think for you right now, I think there’s some big takeaways that we want you thinking about. Right. So John, in today’s episode, what are the big takeaways we want people to have and what are some calls to action here for some of our listeners?

Jon Orr: Yeah. My big takeaway for sure is thinking about optimizing the amount of money that you need to live on and coming up with that number, right? Like if you have that number, then you can optimize the salary that you need to take. And we’ve made a case here that most cases, if you’re looking at getting some of those

those benefits, EPP benefits, RSP room benefit, then salary is a good choice to make because you end up saving more in tax than dividend, especially when you move up in salary. We talked about some key numbers to watch out for, and if those personal income levels that you need are anywhere around those key numbers, then we’ve given you some strategies to kind of manage and optimize.

those key numbers and how to think about those key numbers. a big, big kind of win for me is to think about those. And then the other big win here is to leave the money in the corporation of anything you don’t need, but then think about how to optimize that component. Kyle was talking about, you know, the way that we, you know, utilize whole life insurance inside our corporation as a path through structure, but also as, you know, a way to kind of build our wealth. we’ve got strategies around how to optimize that you can head on over to make you can head.

You can head on over to CanadianWellSecrets.com forward slash masterclass to learn all about how to optimize and structure that side of things.

Kyle Pearce: I love it. love it. And friends, for those who are interested and they feel like they’re ready to dig into the weeds, you can always head over to Canadianwellsecrets.com forward slash discovery and book a discovery call so we can chat sometime real soon.

Jon Orr: Folks, want to remind you here the content you heard here today is for informational purposes only. You should not consider any such information or other materialized legal, tax, investment, financial, or other advice. And Kyle Pierce is a licensed life and accident and sickness insurance agent and VP of corporate wealth management with PanCorp team, which includes corporate advisors and Pan Financial.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

OPTIMIZE YOUR FINANCIAL FUTURE