Physician Tax Savings & Corporate Wealth Calculator
Built for Canadian Medical Professional Corporations. Estimate your yearly tax deferral and long-term wealth gap in about a minute.
In short: The ZAI Wealth Management Physician Tax Savings Calculator is a free tool that estimates how much tax a Canadian doctor could defer by keeping surplus income inside a Medical Professional Corporation. It takes the physician's province, specialty, annual billings, years to retirement, current structure and spouse status, and returns annual tax savings potential, projected wealth gap at retirement and effective tax rates with and without optimization. It covers nine provinces.
Our Canadian Physician Tax Savings Calculator helps incorporated physicians see how much more they could keep by leaving surplus income inside a Medical Professional Corporation (MPC). It uses the combined federal and provincial small business rates and top personal rates for British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Atlantic Canada.
How the Medical Professional Corporation tax framework works
When you earn income personally, anything above your living needs can be taxed at a top combined rate of roughly 48% to 55%, depending on your province. When that income is earned by your MPC instead, the first $500,000 of active business income is taxed at the small business rate of roughly 9% to 12%.
Leaving the surplus in your corporation means roughly 35 to 45 cents more of every dollar is invested and compounding for you. This is tax deferral: you pay personal tax later, when you take money out, ideally in lower-income years such as retirement.
Two things can erode the advantage: taking out more than you need, and letting corporate investments earn more than $50,000 of passive income a year, which starts to claw back your small business rate. Learn more in our passive income clawback guide and our physician tax strategy guide.
Provinces covered
The calculator uses each province's combined small business rate and top personal rate. Provincial guides:
- British Columbia · Alberta · Saskatchewan
- Ontario · Nova Scotia · Newfoundland & Labrador and Atlantic Canada
Want a quick read on your own setup? Try the corporate tax check-up.
Frequently asked questions
What is the corporate passive income clawback limit for Canadian doctors?
If your Medical Professional Corporation earns more than $50,000 of passive investment income in a year, your $500,000 small business limit shrinks by $5 for every $1 over the next year. At $150,000 of passive income it's gone, and your practice income is taxed at the general corporate rate instead of the small business rate.
Should a physician pay themselves a salary or dividends from their MPC?
There's no single answer. Salary builds RRSP room and CPP, is deductible to the corporation and is needed for an Individual Pension Plan. Dividends avoid payroll and CPP contributions and are flexible, but don't create RRSP room. Many physicians use a blend, reviewed each year.
When is the right time for a Canadian physician to incorporate?
Incorporation usually makes sense once your practice earns more than you need to live on, so surplus can stay in the corporation. If you're spending everything you earn or paying down residency debt, setup and accounting costs may outweigh the benefit for now.
What are the tax benefits of a Medical Professional Corporation?
Income kept in an MPC is taxed at the small business rate of roughly 9% to 12% on the first $500,000, compared with top personal rates of about 48% to 55%. That leaves more to invest. It's a deferral: personal tax is paid when money is taken out later.
Which provinces does the calculator cover?
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador, using each province's combined small business rate and top personal rate.
What is a Medical Professional Corporation (MPC)?
A Medical Professional Corporation is a corporation owned by a licensed physician through which they bill for medical services, permitted under provincial law and each province's College of Physicians and Surgeons. Practice income is taxed first inside the corporation at the small business rate, and the physician pays personal tax only on what they take out as salary or dividends. Each province sets its own rules on who may own shares and what the corporation may do.
How much tax does a Medical Professional Corporation save?
A Medical Professional Corporation does not reduce lifetime tax on its own; it defers it. On surplus income, roughly 40 cents more of every dollar stays invested when it is kept in the corporation rather than taxed at the top personal rate, and that extra capital compounds for years. ZAI Wealth Management's example: a physician with $300,000 of surplus can invest about $267,000 inside an MPC versus about $150,000 unincorporated. The free Physician Tax Savings Calculator on zaiwealth.ca estimates the figure by province.
How much does a physician need to retire in Canada?
The amount depends on spending, not on income; most physicians plan around replacing 60% to 80% of their pre-retirement spending from corporate investments, an Individual Pension Plan, RRSPs, TFSAs and CPP. Because a physician's wealth is often concentrated inside the corporation, the retirement plan has to include a tax-efficient schedule for drawing it out. The ZAI Wealth Management calculator projects the retirement wealth gap for a physician's province and timeline.
See all physician money questions →
Calculations are estimates for education and illustration only, based on simplified tax rates and assumptions. They are not tax, accounting or legal advice. Speak with your advisor and accountant before acting.
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