Corporate tax estimator
Updated
Quick answer: Enter your corporation’s taxable active business income and see the federal and provincial tax, split between income eligible for the small business deduction and income above the limit.
An estimate is not a return, and the difference is almost always in the adjustments. An email enquiry will tell you what yours are.
An estimate is a planning number. When you need the figure that gets filed, the T2 is a fixed fee, quoted in writing before anything starts.
Leave at $500,000 unless the limit is shared with associated corporations or reduced by passive investment income or taxable capital.
Estimates for general information, not tax advice specific to your situation. Rates and rules change and your result depends on details a calculator cannot capture. We confirm the numbers for your circumstances once we review your enquiry.
Nothing you type here leaves your browser. This calculator runs entirely on your device — no figures are sent to us or to anyone else.
How much income tax will my corporation owe on this year’s profit?
An incorporated business owner who wants a number to set aside before the year-end file is prepared. It will not produce your T2. It estimates tax on taxable income you supply — arriving at that taxable income from your books is the actual work.
On this page
A worked example
These are the numbers already in the calculator above, so you can follow the arithmetic against the result it is showing.
| Step | Figure |
|---|---|
| Active business income | $250,000 |
| Small business limit | $500,000 — the full amount qualifies |
| Federal small business rate | 9% → $22,500 |
| BC small business rate | 2% → $5,000 |
| Estimated tax | $27,500 (11% combined) |
What it assumes, and where it stops
Every estimate rests on assumptions. These are the ones that would change your number most.
| Assumption | What it means for your number |
|---|---|
| The company is a CCPC claiming the small business deduction | A corporation that is not a CCPC, or has lost access to the deduction, pays the general rate instead — a materially different number. |
| The income is active business income | Investment and rental income are taxed under a different regime with refundable components. This estimate does not model them. |
| No associated corporations | Associated companies share ONE $500,000 limit between them. Two corporations do not get two limits. |
| No passive income grind | Investment income above the threshold in the prior year reduces the business limit, which can push profit to the general rate. |
General information, not advice. Have a CPA confirm it for your situation Owners use it as a quick corporate tax calculator: enter profit and province, and the combined federal and provincial figure comes back with the arithmetic shown.
Two rates, one return
A Canadian-controlled private corporation pays two rates. Active income up to the business limit gets the Small business deduction: the $50,000 passive income rule: 9% federal plus the provincial lower rate. Above it: 15% federal plus the higher rate. In British Columbia, 11% versus 27%, the biggest step most owner-managed corporations face.
The limit is not always $500,000
The federal limit is $500,000, but Nova Scotia uses $700,000 and Prince Edward Island and Saskatchewan $600,000. Income between the limits pays the federal general rate but the provincial lower rate, so the estimator shows federal and provincial splits separately.
The limit can shrink. Associated corporations share a single business limit, reduced by significant group passive income or large taxable capital. Association depends on group-wide control facts, so this input is most often wrong.
What the number is useful for
The estimate informs three choices: what to keep in the company, salary or dividends, and instalments next year. It is not the T2 figure, which also reflects loss carryforwards, capital cost allowance choices, provincial allocation and credits.
Before you rely on it
Run it before year-end, while bonus timing, equipment purchases and capital cost allowance claims can still change. If the number surprises you, talk then. We handle filing and year-round planning; the T2 deadline page gives the due dates.
Free to use on your own site — the snippet keeps a credit link back to this page.
What happens when you get in touch
An estimate usually leads to the same question: who prepares the real thing. This is how that begins.
- A free thirty-minute conversation. What you do, what is filed and what is overdue. You leave with a fixed fee in writing and no obligation to take it.
- Access, in the first week. We are authorized with the CRA, so notices and balances get looked up rather than requested from you. If you are switching firms, your file is requested the same week.
- Current, then ahead. Books set up or brought current, anything overdue scheduled oldest year first, and the next twelve months of deadlines set before they arrive.
Send an enquiry, or ask one question first — both go to a CPA, not a queue.
Where we work
The fee is the same wherever you are. The practice works online, including for Abbotsford businesses, and serves Chilliwack farms and trades, Langley owner-managed firms and Mission operators, across the wider Fraser Valley, and on to companies in Vancouver.
Who this is for, and who it is not
This suits an owner planning ahead, deciding on a bonus or an instalment. It does not suit anyone who needs the filed figure — an estimate is not a return, and the T2 is quoted before it starts.
Corporate Tax Estimator FAQ
What is the small business deduction?+
Why does income above $500,000 cost so much more?+
Do all provinces use the same $500,000 limit?+
Can something reduce my business limit below $500,000?+
Does this cover investment income or capital gains?+
What does this estimator not account for?+
When should I have the number checked?+
A step earlier? The Is incorporating worth it for you? compares a corporation with a sole proprietorship, and sole proprietor vs. corporation covers what rates miss. Facing year-end? The Year-End Playbook paces it in five emails.