Knowledge Hub
Frequently Asked Questions.
25. How do you account for a corporation's share redemption?
In the most general sense, if an individual is holding shares in a corporation or in a business, the disposition of those shares is reported as capital gain or loss.
26. Is it better to take a Salary or Dividend?
There is not correct answer as it depends on your personal situation but in a most general sense an optimal combination must be established. Keep in mind that you should only opt for salary if you are working in the company.
27. Can I put my spouse on a payroll as an employee in my corporation?
Yes, you can put your spouse as an employee provided your spouse is actively working in your business. Actively could be full time, parttime or on call but there must be a role that you spouse is playing. CRA does look at related party payrolls with interest.
28. Can I put myself as a payroll as an employee in my corporation?
Yes, you can put your spouse as an employee provided your spouse is actively working in your business. Actively could be full time, parttime or on call but there must be a role that you spouse is playing. CRA does look at related party payrolls with interest.
29. Can I pay my spouse as a consultant in my corporation?
Yes, you can pay your spouse for their services to the corporation. You must ensure that those services are business related and if the services cost over $30,000 in a year, your spouse must be registered for HST.
30. Can I pay myself as a consultant in my corporation?
Yes, you can bill for your time spent in the company as consulting charges, management fee charges. You must ensure that there are agreements between you and the corporation and there are invoices backing the expense claim.
31. Can I claim employment insurance (EI) benefits if I am employed by my own corporation?
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict critaria must be meet with involve a minimum contribution time.
32. Can my wife claim employment insurance (EI) benefits or maternity benefits (Mat Leave) if I employee her in my own corporation?
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.
33. Can I claim maternity benefits (matt leave) if I am employed by my own corporation?
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.
34. Can I claim paternity benefits (pat leave) if I am employed by my own corporation?
Employment Insurance has a program designed for self-employed people. You must meet the minimum qualification criteria and the benefits are generally limited to sickness and caring for others. It is highly recommended to contact CRA well in advance to register for employment insurance as strict criteria must be meet with involve a minimum contribution time.
35. Can anyone contribute in RRSP?
Yes, any one with earned income can contribute to RRSP. Some exception applies.
36. Can my corporation contribute in RRSP?
Third party contribution are acceptable by financial institution provided the taxpayer has given authorization.