Physicians, Dentists, Lawyers & Consultants
A professional corporation is a powerful tool — and an easy one to run suboptimally. The right mix of salary and dividends changes with your income, your family situation, and your savings goals, and the rules around paying family members have tightened considerably in recent years.
The question isn't only how to pay yourself — it's whether the corporation is still earning its keep once professional fees, filing costs, and the passive-investment rules are counted. We look at the whole picture, not just the year-end.
We act as the year-round tax department for your practice: the corporation's filings, your personal return, and the planning that connects them.
How we help
- Professional corporation setup and CRA account registration, coordinated with your regulatory college's requirements
- Annual remuneration planning — salary, dividends, and bonuses — revisited as your income changes
- Family pay reviewed before a dollar goes out — salary tested for reasonableness against work actually done, dividends tested against the tax-on-split-income rules
- Corporate investment planning as retained earnings build inside the practice
- T2, financial statements, GST where applicable, and your personal T1 handled together
- Planning for a future practice sale or wind-down, including capital gains exemption readiness
Common mistakes we see
- Leaving profit in the corporation with no plan for it — passive investment income above $50,000 a year starts grinding down the small-business deduction — roughly $5 of business limit lost for every $1 of investment income over that line, and many professionals don't notice until the corporate tax bill jumps.
- Paying a spouse or adult child a salary that can't be defended as reasonable for the work actually done — the CRA can deny the corporation the deduction outright. And where family is paid by dividend instead, the tax-on-split-income (TOSI) rules have made that route far riskier since 2018.
- Incorporating too early. For a professional still carrying student debt and spending everything they earn, the corporation can cost more in fees than it saves. We'll tell you if you're not there yet.
- Forgetting that your regulatory college — the College of Physicians and Surgeons of BC, the British Columbia College of Oral Health Professionals, or the Law Society of BC — controls who may hold shares, which limits some family-planning options that work in other businesses.
The British Columbia angle
In BC, a professional corporation must be registered with your regulatory college, not just incorporated at the registry — and the share-ownership rules differ by profession. We also watch the BC-specific pieces that follow you personally: the Employer Health Tax once BC payroll crosses $1,000,000, and the interaction between your corporate pay mix and MSP-era health costs.