Alberta 2026 · Tool
Should you take a salary, a dividend, or a mix?
A quick visualization of three common compensation strategies for Alberta owner-managers. Enter your corporate income and target take-home, see how each approach shakes out, then talk to us about the tradeoffs that don’t fit in a calculator.
Company's active business income before paying you
What you need in hand after personal tax and CPP
Compare scenarios
All Salary
- Salary
- $224,913
- Dividend
- $0
- CPP
- $9,293
- Corp tax
- $30,260
- Personal tax
- $65,629
- Total tax
- $105,181
- Net to you
- $149,991
- RRSP room
- $33,810
- Left in corp
- $244,828
Maximizes CPP contributions and RRSP room. Useful when you want government pension + retirement room.
All Dividend
- Salary
- $0
- Dividend
- $187,569
- CPP
- $0
- Corp tax
- $55,000
- Personal tax
- $37,581
- Total tax
- $92,581
- Net to you
- $149,988
- RRSP room
- $0
- Left in corp
- $257,431
No CPP paid, no RRSP room created. Simple to administer. Good if you already have retirement savings elsewhere.
CPP-Optimized Mix
- Salary
- $74,600
- Dividend
- $112,066
- CPP
- $8,461
- Corp tax
- $46,794
- Personal tax
- $28,208
- Total tax
- $83,463
- Net to you
- $149,997
- RRSP room
- $13,428
- Left in corp
- $266,540
Salary to CPP ceiling builds pension + RRSP room. Remainder as dividend keeps overall tax low. Common strategy for established owner-managers.
Lowest-Tax Strategy
CPP-Optimized Mix: $83,463 total tax
Salary to CPP ceiling builds pension + RRSP room. Remainder as dividend keeps overall tax low. Common strategy for established owner-managers.
Illustrative only. Uses simplified Alberta 2026 assumptions, including published 2026 CPP/RRSP limits, an 11% small business corporate rate, and a 23% general corporate rate. Ignores: spouse income splitting, existing RRSP room, Part IV tax on investment income, CDA planning, detailed personal credits, instalments, and provincial variations for non-Alberta residents. A proper remuneration strategy requires looking at the whole picture with your accountant.
How to Read This
What the calculator actually tells you
All Salary
Pays personal tax on the whole amount. Maximizes CPP contributions (pension down the road) and generates RRSP room (18% of salary, up to $33,810 for 2026). Straightforward: you get a T4, the corp gets a deduction, CRA gets its share. Usually the highest total tax, but the retirement benefits can be worth it.
All Dividend
Company pays corporate tax first, then you pull out the after-tax amount as a non-eligible dividend. No CPP contributions, no RRSP room created. Often the lowest cash-tax strategy in the short term, but you opt out of both government pension and tax-sheltered retirement savings. Makes sense if you already have other retirement plans.
CPP-Optimized Mix
Salary up to the CPP earnings ceiling ($74,600 for 2026) gets you full base CPP participation and creates RRSP room. Anything above that comes out as dividend. This is a common strategy for established owner-managers. You get the retirement benefits of salary without paying personal tax at the top marginal rate on the full amount.
What a Calculator Can't Do
The tradeoffs that don’t fit in numbers
- Spouse income splitting. If your spouse has lower income, paying them a reasonable salary or a dividend from shares they own can cut family tax significantly. The calculator assumes a single earner.
- Existing RRSP and TFSA room. The value of RRSP room depends on whether you’ll use it. If you already have $100K of unused room, paying more salary to generate new room may be the wrong signal.
- Capital Dividend Account (CDA). Tax-free capital dividends from a CCPC’s CDA balance can be materially better than ordinary dividends. Requires tracking and timing across years.
- Part IV tax and passive income. If your corporation has significant investment income, the small business deduction can be clawed back. The calculator assumes active business income only.
- Deferral vs. integration. Leaving income in the corp and deferring personal tax is powerful, but only if you actually invest it. The calculator shows current-year taxes, not long-term compounding.
Want the strategy for your actual situation?
A calculator sees three variables. Your accountant sees the whole picture: spouse income, RRSP room, CDA balance, investment holdings, succession plans. Request a consultation and we’ll tell you what strategy actually fits.