Business Tax Calculators · 2026 · Ontario

Run your own numbers

Four calculators using 2026 federal and Ontario rates, including the Ontario surtax, the health premium, and the small business deduction grind. Everything runs in your browser — nothing you type is sent anywhere.

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Incorporate or stay a sole proprietor

Compares tax paid this year. The corporate column assumes you take salary equal to what you need to live on and leave the rest in the company.

Sole proprietor
Income tax
CPP, both halves
Total this year
Corporation
Personal tax on salary
CPP, both halves
Corporate tax on
Total this year
Tax deferred this year
Left invested in the company
against if you stayed a sole proprietor

This is a deferral, not a permanent saving — tax comes due when you eventually pay the retained profit out as dividends. It also ignores incorporation and annual compliance costs of roughly $3,500 to $8,500 a year, and assumes active business income eligible for the small business deduction.

Salary vs. dividends

Take a fixed amount of pre-tax corporate profit and extract it each way. Non-eligible dividends, from small-business-rate income.

Salary route
Employer CPP the company pays
Gross salary
Personal tax
Employee CPP + CPP2
No EI — an owner-manager controlling more than 40% of the voting shares is in non-insurable employment.
Dividend route
Corporate tax at 11.2%
Dividend paid
Personal tax on dividend
CPPnone
Salary — in hand
Dividend — in hand
Difference
RRSP room created — salary
RRSP room created — dividend$0
CPP contributed — salary

The after-tax gap is usually small — that's integration working. The decision normally turns on the RRSP room and CPP above, not the difference. Assumes an Ontario resident, the basic personal amount, and no other credits.

Corporate tax estimator

Active and passive income, with the small business deduction grind applied. Ontario, 2026.

Small business limit available
Active at 11.2%
Active at 26.5%
Passive at 50.17%
Total corporate tax
Corporate tax
an effective on total income
Cost of the passive income grind
After tax, retained

Uses the 11.2% small business rate in effect since July 1, 2026; a taxation year that straddles that date is prorated (about 11.7% for a December 31, 2026 year-end). Assumes one corporation with no associated companies sharing the limit, taxable capital under $10 million, and no manufacturing rate. Part of the tax on passive income is refundable when dividends are paid — $38.33 per $100 of taxable dividend — so the passive figure overstates the permanent cost.

HST quick method vs. regular

For an Ontario service business. The quick method is available below $400,000 in annual taxable supplies.

Regular method
HST collected at 13%
Input tax credits
Remit
Quick method
8.8% of HST-included revenue
1% credit, first $30,000
Remit
Break-even expenses
above this, the regular method wins at your revenue

The 8.8% rate is for Ontario businesses supplying services. Retailers and wholesalers reselling goods use 4.4%, which changes the answer entirely. The election is made for a fiscal year and generally has to stay in place for at least a year. Capital purchases can still be claimed as input tax credits under the quick method.