I have a corporation – should I declare Dividends (T5) or take a Salary (T4)?

My view centered around this topic is what is important to you. Are you in favor of topping up your RRSP, maximizing your CPP, or do you have child daycare expenses? – If yes, then take a monthly salary or end-of-year management fee. You’ll need a T4 to show the business expense and there will be a source deduction remittance required by CRA payable to your Payroll Account (RP Account) within 15 days of payment to yourself. I usually prefer Dividends as this is a “sharing” of business profits, after tax, which in a corporate setting (in Alberta) is currently taxed at 14% (3% Provincial and 11% Federal) below $500,000. This also allows dividend “sprinkling” amongst shareholders, such as a husband and wife (as long as the correct corporate structuring has occurred).