Corporate vs. personal investing
Compare investing surplus cash inside your corporation vs. investing it personally.
Illustration only. Figures use Ontario 2026 rates; see assumptions.
Corporation (after withdrawing as dividend)
$615,055
Personal
$1,096,189
- 1: Corporation $46,799, Personal $52,306
- 2: Corporation $96,406, Personal $107,023
- 3: Corporation $148,989, Personal $164,263
- 4: Corporation $204,728, Personal $224,143
- 5: Corporation $263,810, Personal $286,784
- 6: Corporation $326,438, Personal $352,313
- 7: Corporation $392,823, Personal $420,863
- 8: Corporation $463,192, Personal $492,575
- 9: Corporation $537,782, Personal $567,593
- 10: Corporation $616,848, Personal $646,070
- 11: Corporation $700,658, Personal $728,166
- 12: Corporation $789,496, Personal $814,047
- 13: Corporation $883,665, Personal $903,888
- 14: Corporation $983,484, Personal $997,872
- 15: Corporation $1,089,292, Personal $1,096,189
Passive income crosses $50,000 in year 13.
On these numbers, investing personally leaves about $481,134 more after 15 years.
Assumptions
- 2026 tax year. Sources: CRA T4127 Payroll Deductions Formulas, 122nd Edition, effective Jan 1 2026 (https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4127-jan/t4127-01-26e.pdf: federal K/V table, Ontario V-table, Ontario surtax V1 formula, Table 8.18 Ontario BPA) and CRA's 2026 indexation adjustment page (https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html: federal bracket thresholds and BPA). Verify each January.; Ontario 2026 Budget, Annex (https://budget.ontario.ca/2026/annex.html): small business CIT rate cut from 3.2% to 2.2% effective July 1, 2026, prorated for taxation years straddling that date; combined federal+Ontario small business rate falls from 12.2% to 11.2%. Federal small business rate (9%) and general combined rate (26.5%) unchanged, no 2026 change announced.; CRA line 40425, Federal dividend tax credit (https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-40425-federal-dividend-tax-credit.html) for gross-ups and federal credit rates (unchanged for 2026); Ontario 2026 Budget Annex (https://budget.ontario.ca/2026/annex.html) confirms the Ontario non-eligible dividend credit stays 2.9863% through 2026, dropping to 1.9863% only from Jan 1 2027..
- The 11.7 per cent combined small business rate is a calendar-2026 blend of 12.2 per cent to 30 June 2026 and 11.2 per cent after it, because Ontario's lower rate drops on 1 July 2026. Exact proration for a fiscal year straddling that date is not modelled.
- No other personal or corporate income is assumed.
- Both the corp and personal paths are always computed in full for comparison; investInsideCorp only selects which one is reported as `highlighted`.
- Passive investment income earned inside the corporation is not separately taxed in this model (real CCPC passive-income taxation and RDTOH refund mechanics are ignored) — this overstates the corporation's after-tax compounding relative to reality.
- Corporate and personal contributions are assumed invested at the start of each year and compound for the full year (annuity-due convention).
- The small business deduction limit is applied to the annual surplus in isolation each year, not blended with other active business income the corporation may earn.
- Personal-side investment growth is taxed every year at the single marginal rate implied by the salary needed to fund the contribution — a simplification; a real portfolio mixes interest, dividends and capital gains taxed differently.
- sbdGrindStartYear flags the first year passive income (plus any passiveIncomeAlready) exceeds the $50,000 grind threshold; it does not model the resulting gradual reduction of the small business limit toward $150,000.
- Ignores the Ontario Health Premium.