Free Canadian Business Tool · 2026

Incorporation Break-Even Calculator

Compare what you’d pay as a sole proprietor versus the small-business corporate rate in your province, net of accounting and filing costs — and see whether incorporation actually saves you money this year.

Your Details

Sets both your personal brackets and small-business corporate rate.
Business revenue minus expenses, before any tax.
What you need to live on. The rest stays in the corp at the low rate — that’s the deferral advantage.
Accountant, T2 filing, registered agent, annual return. Typical range $2,000–$4,500.

Your Results

Estimated Annual Tax Advantage (Deferral)
$0
Sole proprietor: personal tax on full income—
Corporation: tax on retained earnings—
Corporation: personal tax on your salary—
Corporation: extra costs—
Total under corporation—
Small-business corporate rate in your province—
At this income and salary level, incorporation costs more than it saves. The advantage typically appears when you can leave meaningful profit inside the corporation.
What this shows — and what it doesn’t: this is the deferral advantage of leaving profit in the corporation at the small-business rate. When you eventually pull retained earnings out as dividends, personal tax applies (integration). It also excludes CPP differences, income splitting, the lifetime capital gains exemption, and liability protection — the non-tax reasons to incorporate. Treat this as a screening number, then get professional advice.

The tax math is only half the incorporation decision.

Get the free Incorporation Decision guide — liability, CPP, dividends vs salary, and the timing rules that this calculator can’t capture, in plain English.

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Estimates for education only, using 2026 CRA limits ($33,810 RRSP dollar limit) and 2026 federal + provincial tax rates. Not tax, investment, or financial advice. Your exact RRSP deduction limit is on your CRA Notice of Assessment or in CRA My Account. Quebec figures reflect the federal abatement. Consult a qualified professional before acting.