Episode 14: CPP & and EI for Business Owners

Episode 14: CPP & and EI for Business Owners

From The Money Scope Podcast by Benjamin Felix & Dr. Mark Soth

May 3, 2024 · 1h 29m · Episode 14

About this episode

This episode explores the implications of CPP and EI for self-employed business owners, comparing salary and dividend compensation methods.

Business owners often have reservations about paying into the Canada Pension Plan (CPP). Many think they're getting a bad deal by paying both the employer and the employee portion of the contribution, but can they do better by paying themselves dividends? In the last two episodes, we did an extensive review of how you can compensate yourself as a business owner through a private corporation. Today, we take a deeper look at two of the payroll expense aspects that often come up in discussions with financial planners: CPP and Employment Insurance (EI). If you are self-employed, there are a few things you need to consider, including your decision to pay yourself a salary or take dividends. We discuss that in this episode, as well as whether self-employed business owners are really getting the short end of the stick when it comes to CPP and EI contributions. Tuning in today, you'll learn about some of the unique features of CPP, how it's calculated, and the three major risks it offers protection against, plus we walk you through various models to illustrate the consequences of paying yourself dividends versus salary. We also delve into EI for self-employed business owners, the special…

People in this episode

Hosts: Benjamin Felix, Dr. Mark Soth

Topics covered

  • Canada Pension Plan
  • Employment Insurance
  • self-employment
  • business compensation
  • dividends vs salary
  • financial planning

Keywords

  • CPP
  • EI
  • self-employed
  • business owners
  • dividends
  • salary
  • financial planning
  • Canada

Mentioned in this episode

Organizations: Canada Pension Plan, Employment Insurance

Places: Canada

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