Corporate tax deferral calculator
Your numbers
Your result
- Profit left in the corporation
- $180,000
- Corporate tax at 12.2%
- $21,960
- Tax if you paid it to yourselfAt Ontario's top marginal rate
- $96,354
- Tax deferred this year
- $74,394
- Capital available to invest
- $158,040
- Deferral compounding over 15 yearsAt 6% annual growth
- $178,290
Leaving $180,000 in the corporation keeps roughly $74,394 working for you this year instead of going to the CRA. The question isn't whether to defer — it's what that money should be doing while it sits there.
How this is calculated
- Ontario combined small business corporate rate of 12.2% on active income within the $500,000 small business limit.
- Ontario top personal marginal rate of 53.53% on the alternative of paying the same profit out as salary.
- Capital gains inclusion rate of 50% where relevant.
- Ignores the passive-income grind, which reduces the small business limit once corporate investment income exceeds $50,000 a year — a real factor we review case by case.
- Ignores RRSP room created by salary, CPP contributions, and the personal tax you'd eventually pay on withdrawal. The deferral is a timing advantage, not a permanent saving.
This is an estimate for planning discussion only — not tax, legal or investment advice. Your actual result depends on your full situation.
The part the calculator can't show you
The deferral is the easy half. The hard half is what happens to that money once it's sitting in the corporation: passive investment income above $50,000 a year starts clawing back your small business deduction, a corporation stuffed with investments can fail the test for the lifetime capital gains exemption when you sell, and money that has never been planned for tends to be taxed twice on the way to your family.
That's the conversation worth having — and it's exactly what a Fit Review covers.