Incorporation Decision Calculator
Answer the question every unincorporated client eventually asks, with this year's tax each way, the profit retained in the company, and the personal tax deferred on it, then turn it into a client-ready letter, not just a number on screen.
The calculation is only half the work. CodaraFlow finishes the explanation, the tables, and the client-ready letter.
Both Lives of the Same Business, Side by Side
This is one of the built-in calculations in CodaraFlow. Enter the business profit, the owner's after-tax living cost and any other income, and it compares staying a proprietor with incorporating, drawing by salary and by dividend.
- The Unincorporated BaselineThe whole profit on the owner's personal return, with self-employed CPP, both halves.
- The Draw, Sized AutomaticallyA salary draw and a dividend draw are each reverse-solved so the owner nets the same living cash, and shown side by side.
- Corporate Tax at the Blended RateThe small business rate up to the firm's small business limit, the general rate above it.
- The Deferral AdvantageThe personal tax postponed on every dollar left in the company, the real reason most incorporations pay off.
- CPP and RRSP RoomThe contribution and contribution-room differences between the routes, called out separately from tax.
From the Calculation to a Client-Ready Letter
The number is not the deliverable. In CodaraFlow the result drops straight into a letter section: the firm’s approved wording, the three-column comparison, and the notes on costs, compliance and the lifetime capital gains exemption, written in for you. Exported as an editable Word document on your letterhead.
The same reviewed explanation, not whatever the preparer types today.
The retained-profit and deferral wording adapts to whether incorporating saves or costs tax this year.
The proprietor / salary-draw / dividend-draw comparison is laid out and footed automatically.
Finish it in Word, on your firm’s letterhead. No proprietary format.
How the Comparison Is Built
The comparison reflects the mechanics that drive the incorporation decision. The wording is firm-editable.
A CCPC's active business income up to the business limit is taxed at the small business rate; income above it at the general rate.
Dividends are grossed up and credited by class; general-rate income supports an eligible dividend, small-business income a non-eligible one.
An unincorporated owner contributes both the employee and employer halves on self-employment earnings.
Personal tax on retained profit is postponed until it is withdrawn as salary or dividends, not avoided.
The figures are a planning estimate for one year at the rates entered. Incorporation and annual compliance costs, provincial payroll levies, and access to the lifetime capital gains exemption on a future sale belong in the decision alongside the tax figures and remain professional judgment.
Calculations Firms Reach For Alongside It
Get a working demo account, run this calculation on a real file, and export the letter it produces.
Everything is computed from the figures you enter and assembled from your firm’s approved wording. The app never connects to AI.
Editable Word documents on your firm’s letterhead. Monthly pricing, no long-term contracts.
Questions About This Calculation
Is this a standalone calculator?
No. It’s one of the built-in calculations inside CodaraFlow. The result becomes a client-ready letter section, complete with the comparison table and the notes that apply, not just a figure you copy into a client letter.
Does it tell the client to incorporate?
No. It puts this year's tax difference and the deferral advantage on paper so you can advise. Liability, costs, payroll administration and the client's plans for the profit remain your professional judgment, and the notes prompt that conversation.
Can we change the wording and which notes appear?
Yes. Every sentence and every note is firm-editable, and can be overridden on an individual letter.
Does any client data go to an AI?
No. The app never connects to AI. Deliverables are assembled from structured facts and your firm’s approved wording.