Incorporation Tax Calculator
Compare personal vs corporate tax rates for small business income.
2026 Tax YearData stays on your deviceUpdated Apr 1, 2026
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Incorporation saves $19,894.13 in immediate tax
Note: retained corporate earnings are taxed again when paid as dividends
Sole Proprietor
Income
$150,000.00
Total Tax
$44,188.13
Take-Home
$105,811.87
Incorporated
Corp Tax (12.2%)
$10,980.00
Personal Tax on Salary
$13,314.01
Retained in Corp
$79,020.00
Frequently Asked Questions
When does incorporation save tax?
Incorporation mainly benefits if you earn more than you spend personally. The small business tax rate (9% federal + provincial) is much lower than personal rates, allowing you to defer tax on retained earnings.
What is the SBD limit?
The Small Business Deduction applies to the first $500,000 of active business income. Above this, the general corporate rate (15% federal) applies.
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Built and reviewed by Konstantin Iakovlev · Data from CRA, CMHC, Bank of Canada · MethodologyDisclaimer: This calculator provides estimates based on publicly available data from CRA and other government sources. It does not constitute financial advice. Consult a qualified advisor for decisions about your specific situation.
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