CPD Course for CPA - Owner-Manager Tax Planning: Dividends, Wages, and Bonuses

Course Name: Owner-Manager Tax Planning: Dividends, Wages, and Bonuses

CPD Hours: 2.5

Type: Online/Video

Price: ~~$150~~ $120

Owner-managers of Canadian private corporations have several options for withdrawing funds from their businesses, including salary, wages, bonuses, and dividends. Choosing the appropriate mix of compensation can have important consequences for both corporate and personal taxes, as well as CPP contributions, RRSP contribution room, cash flow, and long-term financial planning.

This course provides Canadian accountants and tax professionals with a practical overview of owner-manager remuneration and tax planning strategies. Participants will examine the tax treatment of salary and wages, eligible and non-eligible dividends, and bonuses, while considering the principles of tax integration and the interaction between corporate and personal taxation.

The course also explores important planning considerations involving the General Rate Income Pool (GRIP), Refundable Dividend Tax on Hand (RDTOH), the Capital Dividend Account (CDA), bonus timing and deductibility, and the Tax on Split Income (TOSI) rules. Practical examples and planning scenarios illustrate how different remuneration strategies can affect the corporation and its shareholders.

By the end of the course, participants will have a stronger understanding of how to evaluate salary, dividend, and bonus alternatives; identify relevant tax and non-tax considerations; and assist owner-managed businesses with effective year-end and ongoing remuneration planning.

Topic 1 – Owner-Manager Remuneration and Tax Planning Fundamentals

1.1 Understanding Owner-Manager Remuneration Planning

1.2 Corporate vs. Personal Tax Considerations

1.3 The Concept of Tax Integration in Canada

Topic 2 – Paying Salary and Wages to Owner-Managers

2.1 Tax Treatment of Salary and Wages

2.2 CPP, RRSP Room, and Other Salary Considerations

2.3 Deductibility and Reasonableness of Owner-Manager Compensation

Topic 3 – Paying Dividends to Owner-Managers

3.1 Tax Treatment of Canadian Dividends

3.2 Eligible vs. Non-Eligible Dividends

3.3 Dividend Tax Credits and Corporate Tax Accounts

Topic 4 – Salary vs. Dividends: Choosing a Remuneration Strategy

4.1 Comparing the Tax Cost of Salary and Dividends

4.2 Non-Tax Factors in the Salary-or-Dividend Decision

4.3 Practical Remuneration Planning Scenarios

Topic 5 – Bonuses and Year-End Remuneration Planning

5.1 Using Bonuses in Owner-Manager Tax Planning

5.2 The 180-Day Rule and Bonus Deductibility

5.3 Timing Bonuses and Managing Corporate Year-End Income

Topic 6 – Corporate Tax Accounts and Dividend Planning

6.1 General Rate Income Pool (GRIP) and Eligible Dividends

6.2 Refundable Dividend Tax on Hand (RDTOH)

6.3 Capital Dividend Account (CDA) Planning Opportunities

Topic 7 – Income Splitting and Family Remuneration

7.1 Paying Salaries to Family Members

7.2 Tax on Split Income (TOSI) and Private Corporations

7.3 Family Dividend Planning and TOSI Exceptions

Topic 8 – Integrated Owner-Manager Tax Planning Strategies

8.1 Combining Salary, Dividends, and Bonuses

8.2 Retaining Income in the Corporation vs. Paying It Out

8.3 Year-End Owner-Manager Tax Planning Checklist