Yes you would pay 4.95 per cent of your salary to CPP and your corporation does contribute the other half (4.95 per cent) on your salary but if your RSP contribution is $20,000 then you pay $990 to CPP, your corporation pays the same but avoiding 15 per cent corporate tax so the net effect is you get to make an RRSP contribution of $20,000 and costing you only $1,813 (4.95 per cent of $20,000 = $990 + (990 – 0.15 per cent of 990) in CPP contributions but avoiding $3,000 in corporate tax. Summary Withdrawing dividends from your corporation can mean you keep more of your income – up to certain limits. Some of this additional income is withdrawn at the cost of not contributing to CPP. However, this does give you greater freedom to invest more flexibly and for greater long term tax efficiency – and as a business owner you are investing right? You don’t have all your future retirement income tied up in your business, do you? I’ll cover this in my next article. Richard Yasinski is an independent financial planner with his own firm, Financially Sound Inc., in practice in Ottawa since 1996. He can be reached by email at ryasinski@financiallysound.ca or by phone at (613) 271-9994 ext. 101. Did you know we offer a special rate for Construction workers? Call now to set up your corporate rate for all four of these properties. Karina Bueckert 204-325-0578 Super 8 Winnipeg 1485 Niakwa Road East Winnipeg, MB Phone: 204-253-1935 www.winnipegsuper8.com Quality Inn Winkler 851 Main Street Winkler, MB Phone: 204-325-4381 www.qualityinnwinkler.com Motel 6 Headingley 4400 Portage Avenue Headingley, MB Phone: 204-896-9000 www.motel6.com/en/motels. mb.headingley.5718.html Days Inn Steinbach 75 PTH 12 North Steinbach, MB Phone: 204-320-9200 www.daysinnsteinbach.com Reach key decision makers in the CDCR Hotel Directory to attract construction crews, executives and extended stay guests with your hotel listing! Basic listings start at $195 and comprehensive listings are $495 which gives you at least 6 issues a year. Register your properties by January 31st and get a bonus online banner ad for one month! For more de- tails on directory listings or general advertising con- tact Chase 905-228-1151 or email chase@cnrgp.com