Teplov CPA Complimentary Review
Tools for Canadian IT Contractors

Incorporation tax & cash-flow estimator

Compare 2026 Ontario personal cash with a salary-only corporation scenario and see how much cash remains inside the corporation.

2026 Ontario calendar-year case

Start with a simple, supportable scenario.

For an Ontario resident with no other income and a corporation with a January 1–December 31, 2026 tax year. Enter a salary that the corporation can cover along with employer CPP.

This estimate is for:

Model assumptions and limits

This educational estimate assumes a 2026 calendar-year Ontario corporation eligible for both federal and Ontario small business deductions, and an Ontario-resident owner with no other income. The federal small business rate is 9%. Ontario's lower rate was 3.2% through June 30 and 2.2% from July 1, so this calendar-year model uses a day-weighted provincial rate. A different corporate year-end requires a different rate.

The comparison includes 2026 federal and Ontario income tax brackets, basic personal amounts, the federal employment amount, CPP credits and enhanced CPP deductions, Ontario surtax, tax reduction and health premium. It assumes a single owner below the CPP age limits, no EI, no other deductions or credits, and no losses. The self-employed case deducts the permitted CPP amounts. The incorporated case assumes salary only, no dividends, and deducts employer CPP.

It does not model GST/HST, RRSPs, investment income, other employment or self-employment income, EI, associated corporations, provincial allocation, PSB income, income above the available business limit, or tax when retained funds are later paid to the owner. Corporate cash shown is not personal take-home pay. These results are planning illustrations, not a determination that incorporation will save tax.

Sources: CRA 2026 Ontario payroll tables, CRA corporate rates, CPP contributions, and self-employed CPP deduction. Reviewed October 28, 2026.