Free Tax Calculator

Should I Incorporate?

See how much tax you could save by incorporating your business. Compares your current sole proprietorship tax to a Canadian-controlled private corporation (CCPC) at 2025 CRA rates.

Incorporation involves more than just tax savings. Legal liability, admin costs, and your specific situation all matter — book a consultation for personalised advice.
Your Business
After business expenses, before personal tax (T2125 line 8299)
$
$150K
How much you need to take out annually to live on
$
$80K
Personal
Employment, rental, investments, etc.
$
Estimated Annual Tax Savings
—
Click Calculate My Savings to see your comparison.
Current: Sole Proprietorship
Unincorporated
Net business income—
CPP (self-employed 2×)—
Federal income tax—
Provincial tax—
Total tax paid—
After-tax cash—
Option: CCPC
Incorporated
Corp tax (SB rate)—
Salary paid to you—
Personal CPP (employee)—
Personal income tax—
Corp CPP match—
Left in corporation—
Total tax paid—
Personal after-tax cash—
Cost of Incorporating
Incorporation (one-time)~$1,500
Annual T2 corporate return~$1,500–$2,500
Payroll admin (T4, ROE)~$500–$1,000/yr
Annual maintenance (minutes, registry)~$100–$200
Estimated annual cost~$2,100–$3,700
Benefits of Incorporating
Tax deferral — retain profits in the corp at the small business rate (11–12.2%) instead of your personal marginal rate (up to 53%+)
Limited liability — your personal assets are protected from most business debts and claims
Income splitting opportunities — pay eligible family members reasonable salary or dividends
Flexible compensation — choose the optimal salary/dividend mix each year based on your situation
Lifetime Capital Gains Exemption (LCGE) — potential $1.25M+ tax-free gain when you sell qualifying shares
Professional credibility — some clients and contracts require or prefer a corporation
Choose your fiscal year-end — more flexibility for tax planning
Drawbacks to Consider
Higher admin costs — annual T2 filing, payroll, bookkeeping, and corporate maintenance fees
Double taxation on extraction — money left in the corp is eventually taxed again when paid out as dividends
Complexity — separate bank accounts, books, tax returns, and CRA filings (GST/HST, payroll remittances)
Personal tax credits lost — no claim for business losses against personal income once incorporated
TOSI rules (Tax on Split Income) — CRA limits income splitting with family members in many situations
Personal guarantees — banks often require them anyway, reducing the liability protection benefit
Costly to wind down — dissolving a corporation requires final tax returns and CRA clearance
Enter your numbers and click Calculate My Savings to see a personalised comparison.

Thinking about incorporating? Brookside CPA handles the full process — incorporation, CRA registrations, payroll setup, and ongoing tax planning.

Book a Free Consultation

2025 rates: Federal brackets 14.5%–33% · BC 5.06%–20.5% · AB 8%–15% · ON 5.05%–13.16% · Self-employed CPP: 11.9% (both portions) on $3,500–$71,300 · CPP2: 8% on $71,300–$81,200 · CCPC SB rate: 11% BC, 11% AB, 12.2% ON · Incorporated scenario assumes salary strategy up to CPP max then retaining surplus in corp. For educational purposes only — not tax advice.