One of the most important elements to consider when operating your practice through a professional corporation is how you will be compensated for your services. The good news is that the operations of your practice within a professional corporation provides you with options when it comes to your compensation strategy including salary, dividends or even a hybrid structure where you receive both salary and dividends.
As in most situations, there is not one strategy that is the optimal solution for all as a number of personal factors must be considered. Some of the factors that should be considered to determine your optimal compensation strategy are:
- What are your cash flow needs?
- Do you want to contribute to RRSP’s?
- Do you want to be eligible for CPP benefits upon retirement?
- Are you incurring child care costs?
- What level of income is your spouse earning?
- How do you plan to use your professional corporation in retirement?
Give us a call or come in and see us and we can discuss the factors that affect you personally and tailor a specific compensation plan that is the most effective for your needs and goals.