Executive Compensation Strategy
When you start a business with the goal of incorporating, tax planning is important. Your decision-making process to improve your finances will even affect your salary and that of your partners. As a shareholder of your company and an employee of your own company, you will be faced with two choices: should you pay yourself a salary, or is it better to take a dividend? Is it possible to take both? What about advances?
At EB Conseil Fiscal Inc. we know that the choices are numerous. Our team of experts will analyze your current situation and help you choose the most advantageous option for your company in terms of executive compensation strategy. Let us guide you to an optimal tax situation!
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The Elements Considered by Our Team
The executive compensation plan best suited to your company depends on several factors. To help you make an informed decision, our team makes sure that nothing is left to chance and gives you an accurate picture of reality. In addition to our various accounting services, our exhaustive analyses evaluate your situation from top to bottom.
Here are the main elements considered by EB Conseil Fiscal Inc:
Unpaid Advance
In the event of an advance not being repaid by one of the directors, your tax return could be affected.
Since this can have a direct impact on your tax situation, our team makes sure to assess the consequences of any situation that arises.
Small Business Corporation Status
Small business corporation status comes with its own set of tax rules and benefits. Whether your business operations are interprovincial or in Quebec, you may be able to take advantage of significant deductions available to small businesses.
Consult us to confirm whether this status would allow you to benefit from a potential tax reduction.
Income from Other Sources
If you receive income from other sources than your main company, your tax bracket may increase.
With this information in hand, EB Conseil Fiscal Inc. can suggest a more advantageous status to improve your tax situation.
Possibility of Deducting the Small Gain
Contrary to what you may believe, capital losses could be beneficial to you from a tax standpoint. Indeed, your losses are deducted from your taxable capital gains. EB Conseil Fiscal inc. selects the appropriate executive compensation strategy for your situation, taking into account all the details.
Opportunity to Pay a Tax-Free Dividend
The Capital Dividend Account (CDA) allows you to pay a tax-free benefit to shareholders. Since the CDA is very complex to calculate and governed by numerous rules, our team will be pleased to evaluate whether this option is possible for your company.
Here are some examples of the balance included in the CDA:
- Portion of non-taxable capital gains in excess of the non-deductible portion of capital losses
- Capital dividends received from subsidiaries
- Portion of losses related to a business investment that is not deductible
- Non-taxable portion of the proceeds from the sale of eligible capital property
- Non-taxable portion of capital gains received to the corporation from a trust
Executive Compensation
Types of Executive Compensation Strategies
In addition to the tax considerations for choosing an executive compensation strategy, EB Conseil Fiscal Inc. also takes your circumstances into account. Certain advantages, such as social benefits, can tip the balance, as well as your personal and entrepreneurial goals.
Base Salaries
wages offer some significant benefits. Depending on the size of your business, your age, your investor profile, and your long-term plans, a salary may be a favorable option. Among other things, you can build up insurable earnings under the Quebec Parental Insurance Plan and establish RRSP contribution room.
Profit
Just as with salary, your investor profile plays a role in the decision-making process. If you prefer “aggressive” investments, a dividend payout could be a big advantage to you, even though the result will be variable pay .
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Executive Compensation Consulting with EB Conseil Fiscal Inc.
Our team provides a complete and global picture of your situation in order to evaluate the best form of executive compensation strategy. We consider several factors, from your personal objectives to your profile as an investor, as well as the type of business you run. Together, we plan every tax action that will lead you to success.
For more information on our services, make an appointment with a member of our team!