Free tool

Should I Incorporate? Savings Estimator

See roughly how much tax you could defer by leaving profit in a corporation instead of taking it all personally. Built for BC small businesses and contractors.

Your annual business profit (before tax) How much do you need to take personally each year? Your personal marginal tax rate (BC)

$8,600

estimated tax deferred by incorporating, this year

Simplified estimate using an ~11% BC small-business corporate rate on retained profit vs your personal marginal rate. It shows tax deferral, not permanent savings — tax applies later when you withdraw the funds. Real outcomes depend on CPP, dividends, RRSP room and your full situation. Not tax advice — book a free consult for your real numbers.

How incorporating saves tax

Should you incorporate? What the numbers really show

Incorporating lets you leave profit inside your company taxed at the low small-business rate (around 9–12% combined, versus personal rates that climb past 40%). That deferral is the main tax benefit — you only pay personal tax on what you actually take out, so you can smooth income across good and lean years.

But incorporation adds a T2 return, bookkeeping and filing costs, so below a certain income it isn’t worth it. The estimate above shows the potential deferral at a marginal rate you choose; the right answer depends on how much you need to live on, your province, and your plans. It’s a starting point for a conversation, not a decision on its own.

This calculator gives a general estimate for information only — not tax advice specific to your situation. Rates and rules change, and your result depends on details it can’t capture. We confirm the numbers for your circumstances in a free consult.

Questions

Good to know

Does incorporating actually save me tax?+

It mainly defers tax. Profit you leave in the company is taxed at roughly 11% in BC instead of your personal rate (up to 53.5%). You pay personal tax later when you withdraw it, so the benefit is holding onto more money now to reinvest or smooth your income. If you spend everything the business earns, the tax benefit is small and incorporation is more about liability protection.

At what income should I incorporate?+

There is no magic number, but the benefit grows once you are consistently leaving profit in the business beyond what you need to live on. Many owners find it worthwhile once profit is comfortably into six figures. We will look at your real numbers in a free consult.

What does incorporating cost?+

There is a one-time incorporation cost plus ongoing annual work: a T2 corporate return, bookkeeping, and a way to pay yourself (salary or dividends). We quote all of it as a fixed fee so you can weigh it against the tax benefit.

Free tools & guides

Run your own numbers first

No sign-up — quick calculators and straight answers from our team.

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Want the exact numbers for your situation?

These tools are a starting point. Book a free consult and we’ll run your real figures — and give you a fixed quote to handle it all.

Book a Free Consult Call (604) 832-1743