Running a business
Incorporate, or stay a sole proprietor?
The yearly cost of a corporation, against what it can save.
A starting point, not tax advice. Nothing you type leaves your browser.
What this does not cover. A directional comparison only. The actual answer depends on your province, your other income, the small business deduction limit, and what you plan to do with the retained money.
How this works
What the number means
A corporation is worth its admin cost mainly when you earn more than you need to spend. Profit left inside is taxed at the small business rate rather than your personal rate, and the difference is a deferral you keep until you take the money out.
If you draw out everything you earn, that deferral mostly disappears and you are left paying for the admin. That is the comparison this makes: retained profit against the cost of the structure holding it.
Liability, credibility with larger customers, and the ability to bring in a shareholder are real reasons to incorporate that no calculator scores.
Worked example. On $120,000 of profit where you only need $75,000, there is $45,000 that can stay in the corporation — usually enough to justify the admin. On $80,000 of profit where you need all of it, usually not.
Sources
- CRA — Current year tax rates and income brackets (2026) — modified 25 June 2026
- CRA — T4032-ON Payroll Deductions Tables, Ontario — modified 17 December 2025
- CRA — Corporation tax rates — modified 30 May 2025
Rates change. The CRA page is the authority, and these are reviewed every January.
Questions
What does it cost?
It depends on how many transactions you have, how many people you pay and how complex the year-end is. There is no charge for the first consultation, and you can ask what a piece of work will cost before you commit to it.
Next step
Want someone to check the real figure?
A calculator estimates. A consultation answers for your actual situation. The first one is free.