Swift Accounting & Business Solutions Ltd.
2440 Kensington Rd NW, Calgary, AB T2N 3S1
(403) 999-2295 · mailbox@swiftltd.ca
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Sole Proprietorship vs Corporation Calculator (2026)
Compare a sole proprietorship with a corporation on the same take-home pay. See the tax and CPP, what stays in the company and what paying it out costs.
Enter your yearly business profit to see the comparison.
Extra cash left in the corporation
Sole proprietorship Left over
- Corporate tax
- Personal tax
- CPP
- Cash to you
Corporation Left over
- Corporate tax
- Personal tax
- CPP, you and the corporation
- Cash to you
Part of this profit is above the small business limit, so it pays the general corporate rate. That part could be paid out as eligible dividends, which carry a larger tax credit. This tool treats every dividend as non-eligible, so the payout tax shown may be high.
Quebec personal tax is an estimate. Confirm it with an accountant before you decide.
Estimate based on 2026 rules. Not tax advice.
How it's calculated
- Both options give you the same cash after personal tax. The result compares what is left over, not which side pays less tax.
- A sole proprietor pays personal tax on all of the profit, plus both halves of CPP on self-employment income.
- The corporation pays the small business rate up to the business limit ($500,000 federally) and the general rate above it. It then pays you by dividend or salary.
- The payout line assumes you take everything left in the corporation as non-eligible dividends in the same year.
- The extra yearly cost is treated as an after-tax cost. Replace the default with your own accounting quote.
Frequently asked questions
Does a corporation save tax compared with a sole proprietorship?
Mostly it postpones tax. The corporation pays a low rate on profit it keeps, and you pay personal tax when you take that money out. The calculator shows the cash left in the corporation, then what remains after you pay it all out.
Why is CPP different in the two columns?
A sole proprietor pays both halves of CPP on self-employment income and earns CPP pension for it. Dividends carry no CPP, so that cost drops out, and so does the pension it would have bought.
Should the corporation pay me a salary or dividends?
Dividends leave more cash in the corporation. A salary builds CPP pension and RRSP room but costs CPP on both sides. Switch the setting to compare the two.
What does this calculator leave out?
Investment income earned inside the corporation, the lifetime capital gains exemption, income splitting with family, GST and any other income you have. It treats every dividend as non-eligible, so the payout tax may be high when profit is above the small business limit.
What is the extra yearly cost?
It covers what a corporation adds: a corporate tax return, annual filings, bookkeeping and legal upkeep. Use your own accountant's quote. The calculator takes it off after tax in the final comparison.
Talk to a Swift accountant
Send us your numbers and we will check the structure against your whole situation.