Questions doctors ask about money, answered

ZAI Wealth Management works with physicians across Canada, with a particular focus on internationally trained doctors. Clients include physicians who are already incorporated and those deciding whether to set up a Medical Professional Corporation. The firm has served more than 50 internationally trained physicians and serves doctors in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador.

ZAI Wealth Management does not charge physicians out-of-pocket fees for planning, plan reviews or advice. When a financial strategy is put in place, ZAI Wealth is compensated by the financial institution it is placed with, and that arrangement is explained before the physician decides on anything. There is no obligation to proceed after the strategy call or the plan. Full details are on the firm's fee disclosure page.

ZAI Wealth Management is located at Unit 301, 39 23rd Street East, Saskatoon, Saskatchewan, S7K 0H6. Physicians can meet the team in person in Saskatoon or by video from anywhere in Canada. The firm is a division of Zenith Advisory Inc.

The ZAI Wealth Management strategy call is a free 30-minute conversation about the physician's goals, their corporation (or whether they should have one) and where the biggest tax and planning opportunities are. No preparation is needed and there is no obligation. The call ends with clear next steps and, if the physician wants to continue, a plan covering tax, investing, insurance, retirement and estate.

Yes. ZAI Wealth Management works alongside each physician's accountant and lawyer so the tax plan, legal structure and financial plan fit together. The firm does not replace an accountant; it coordinates with them on salary versus dividend decisions, corporate investing and incorporation timing.

No. Many physicians come to ZAI Wealth Management before they incorporate. The firm helps a doctor decide when a Medical Professional Corporation makes sense for their income and province, then works with their accountant and lawyer to set it up correctly.

ZAI Wealth Management serves physicians in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador. Advisors are licensed in Saskatchewan, Alberta and Ontario, and the firm meets doctors in person in Saskatoon and by video everywhere else.

ZAI Wealth Management works only with physicians, so the planning starts from the realities of a medical career: a Medical Professional Corporation, a late start for internationally trained doctors, irregular billings, and provincial rules such as Ontario's CPSO Certificate of Authorization. Many general advisors charge 1% to 2% of assets every year; ZAI Wealth charges no out-of-pocket planning fee.

ZAI Wealth Management does not have a Calgary office; its advisors are licensed in Alberta and meet Calgary and Alberta physicians by video and phone from the firm's Saskatoon head office. Planning for Alberta doctors centres on the Alberta Medical Professional Corporation, the province's roughly 11% small business rate versus a 48% top personal rate, and the $50,000 passive income clawback.

ZAI Wealth Management does not have a Toronto office; its advisors are licensed in Ontario and meet Toronto and Ontario physicians by video and phone from the firm's Saskatoon head office. Planning for Ontario doctors centres on the Ontario Medical Professional Corporation, the CPSO Certificate of Authorization, the province's roughly 11.2% small business rate versus a 53.53% top personal rate, and the passive income clawback.

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.

A physician in Canada usually benefits from incorporating once they earn more than they need to live on, because surplus income left inside a Medical Professional Corporation is taxed at roughly 9% to 12% instead of a top personal rate of roughly 47% to 55%. If a doctor spends everything they earn, incorporation adds cost without much benefit. ZAI Wealth Management reviews income, spending, debt and province before recommending a structure.

The right time to incorporate is usually when practice income reliably exceeds personal spending needs, often within the first one to three years of independent practice. Incorporating during residency rarely helps because there is little surplus to defer. Internationally trained physicians who start practice later often incorporate sooner so the deferral begins immediately. ZAI Wealth Management models the decision with the physician's accountant.

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.

The small business deduction lowers the federal corporate tax rate to 9% on the first $500,000 of active business income earned by a Canadian-controlled private corporation, and every province adds its own reduced rate on top. For a Medical Professional Corporation the combined rate is roughly 9% to 12% depending on the province. Saskatchewan's provincial limit is $600,000. The deduction is shared between associated corporations and shrinks when passive investment income exceeds $50,000.

Combined small business rates for a Medical Professional Corporation are roughly 10% in Saskatchewan, 11% in Alberta, 11% in British Columbia, 11.2% in Ontario, 10.5% in Nova Scotia and 11% in Newfoundland & Labrador, each being the 9% federal rate plus the provincial rate. Top personal rates range from about 47.5% in Saskatchewan to about 54.8% in Newfoundland & Labrador. ZAI Wealth Management publishes a guide for each province on zaiwealth.ca.

No. Incorporation costs $2,500 or more, provincial billing takes time to start, and a new physician who takes almost everything out to repay residency debt gets no deferral benefit. ZAI Wealth Management's rule: practise unincorporated first, clear high-interest debt and build a cash reserve, then incorporate once a few thousand dollars a month is reliably left unspent.

Most incorporated physicians use a blend. A T4 salary creates RRSP contribution room, builds CPP entitlement, supports a mortgage application and makes an Individual Pension Plan possible; dividends are more flexible, avoid payroll administration and can be timed around income. ZAI Wealth Management sets the mix each year with the physician's accountant based on cash needs, registered room and retirement timeline.

No. Dividends are not earned income, so a physician paid only in dividends builds no RRSP contribution room and no CPP entitlement. RRSP room is 18% of the previous year's earned income up to the annual limit set by the Canada Revenue Agency, which is one reason many physicians draw at least enough salary to maximize it.

A physician can pay a spouse a reasonable salary for work the spouse actually does for the corporation, but paying dividends to a spouse or adult child is restricted by the tax on split income (TOSI) rules, which tax most such dividends at the top personal rate unless an exclusion applies. Provincial rules also limit who may hold shares in a Medical Professional Corporation. ZAI Wealth Management reviews family income splitting case by case with the physician's accountant.

A physician should take out enough to cover personal spending, debt payments and registered contributions, and leave the rest inside the corporation to compound at the small business rate. Taking out more than needed just to save personally usually costs 30 to 40 cents on the dollar in tax that could have been deferred. ZAI Wealth Management builds a draw schedule around the physician's real budget.

The passive income clawback reduces a corporation's federal $500,000 small business limit by $5 for every $1 of passive investment income above $50,000 in the previous year, and eliminates the limit entirely once passive income reaches $150,000. Above that, practice income is taxed at the general corporate rate of roughly 23% to 30% instead of 9% to 12%. Most provinces follow the federal rule. ZAI Wealth Management's corporate tax check-up shows a physician where they stand.

Passive income includes interest, rental income, foreign dividends, taxable capital gains and most income from portfolio investments held inside the corporation. Dividends from connected Canadian corporations and gains on active business assets are generally excluded. A corporation with roughly $1 million invested at a 5% yield already generates $50,000 of passive income, which is where the clawback begins.

ZAI Wealth Management uses three main defences: investing for deferred growth rather than annual income, so gains are realized when the physician chooses; moving surplus into an Individual Pension Plan, where growth is not corporate passive income; and funding corporate-owned permanent insurance, where growth is tax-exempt and the death benefit can flow through the capital dividend account. Which mix fits depends on the physician's age, surplus and retirement timeline.

An Individual Pension Plan is a defined-benefit pension sponsored by the physician's own corporation. It usually allows larger tax-deductible contributions than an RRSP for physicians over about age 40, its growth does not count as corporate passive income, and contributions are deductible to the corporation. It requires a T4 salary history and ongoing actuarial administration. ZAI Wealth Management models whether an IPP beats a plain RRSP for each physician.

Corporate-owned permanent insurance lets a Medical Professional Corporation move surplus into a policy whose cash value grows tax-exempt and does not count as passive income, so it does not erode the small business rate. On death, the benefit above the policy's adjusted cost basis is credited to the capital dividend account and can be paid to the physician's family tax-free. ZAI Wealth Management sizes any policy around the physician's actual protection and estate needs.

Advisors like IPPs because they allow larger deductible contributions than an RRSP after age 40, permit past-service funding, keep growth outside corporate passive income and offer creditor protection. Accountants push back because IPPs need an actuarial valuation every three years, extra filings, a T4 salary, and lock the money until retirement. ZAI Wealth Management's test: over 40, consistent high income, surplus not needed before retirement, and approaching the $50,000 passive income line.

An internationally trained physician who begins practice in their late 30s or 40s catches up by deferring as much surplus as possible inside a Medical Professional Corporation from the first year, taking enough salary to build RRSP room, and using an Individual Pension Plan once income is stable, since IPP contribution room grows with age. ZAI Wealth Management has worked with more than 50 internationally trained physicians on exactly this catch-up plan.

Yes, if the total cost of a Canadian resident's specified foreign property exceeds CAD 100,000 at any point in the year, they must file Form T1135 with the Canada Revenue Agency. This includes foreign bank accounts, rental property, shares and some pensions, but not personal-use property such as a family home abroad. Canadian residents are taxed on worldwide income, so foreign rental income must also be reported. ZAI Wealth Management coordinates this with the physician's accountant.

An international medical graduate should usually incorporate as soon as independent practice income exceeds living costs and debt payments, which for many IMGs is the first year of practice. Incorporating during residency rarely helps. Setting up proper corporate accounts and bookkeeping from day one avoids costly clean-up later. ZAI Wealth Management plans the transition with the physician's accountant and lawyer.

Generally no. Money sent to support parents or siblings abroad is a personal expense and is not deductible to the physician or the corporation. Paying a family member a salary is only deductible if they perform real work for the corporation at a reasonable rate. ZAI Wealth Management plans family support as a budgeted personal draw so it does not distort the corporate tax strategy.

Pensions and savings built before becoming a Canadian resident are generally not taxed on arrival, but income they produce afterward is taxable in Canada, and the accounts may need to be reported on Form T1135. Some foreign pensions can be transferred into a Canadian RRSP under specific rules. ZAI Wealth Management documents arrival values and reviews each account with the physician's accountant.

Generally no. The NHS Pension Scheme is an unfunded public service scheme and UK rules restrict transfers out, so it cannot be moved into an RRSP or other Canadian registered plan. Most physicians leave it deferred and inflation-linked, to be paid from UK retirement age, with the Canadian tax treatment set by the Canada–UK tax treaty. ZAI Wealth Management builds the Canadian replacement through the Medical Professional Corporation, RRSP contributions and, after 40, an Individual Pension Plan.

No. Canada does not recognize the ISA wrapper, so once the owner is a Canadian resident, income and gains inside it are taxable on the Canadian return. Assets are valued at fair market value on arrival, so growth before the move is not taxed in Canada. If the ISA plus other foreign property cost more than CAD 100,000, it must be reported on Form T1135. ZAI Wealth Management reviews whether to keep or cash in the ISA with the physician's accountant.

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.

Sometimes. The Lifetime Capital Gains Exemption shelters up to $1.25 million of capital gains per person on qualified small business corporation shares, but a Medical Professional Corporation only qualifies if at least 90% of its assets are used in the active business at sale and more than 50% throughout the preceding 24 months. Corporations that hold large investment portfolios usually need to be purified first. ZAI Wealth Management plans the exit years in advance.

When a physician retires, the Medical Professional Corporation can keep operating as an investment holding company, with the retired physician drawing dividends over time, or it can be wound up with the assets distributed and taxed. Most provinces require the corporation to stop practising medicine and may require a name change. A gradual draw-down over many years usually produces far less tax than a single wind-up. ZAI Wealth Management builds the schedule into the retirement plan.

An incorporated physician needs a will that deals with the corporation's shares, often a second will for corporate assets in provinces that allow it, named beneficiaries on registered accounts and insurance, and a plan for the capital dividend account so insurance proceeds pass to family tax-free. Without planning, a corporation's investments can be taxed twice on death. ZAI Wealth Management coordinates this with the physician's lawyer.

A physician who stops being a Canadian resident faces departure tax: most assets, including Medical Professional Corporation shares, are deemed sold at fair market value on the day residency ends, so capital gains are taxed even though nothing was sold. The corporation itself must also stop practising medicine in the province. ZAI Wealth Management recommends starting exit planning at least five years before a planned move.

Usually not. A holding company does not avoid the passive income clawback; what it provides is creditor protection and a cleaner separation between the practice and the investments, at a cost of roughly $1,500 to $3,000 a year. Some provinces do not allow a holdco to own Medical Professional Corporation shares at all. ZAI Wealth Management recommends a holdco only once corporate investments and yearly savings are large enough to justify the cost.

Usually not. Owning the building inside a Medical Professional Corporation exposes it to practice liability, can create double tax on sale, and can cost the physician the $1.25 million Lifetime Capital Gains Exemption on the MPC shares if non-practice assets become too large. The common alternative ZAI Wealth Management uses is a separate property company that owns the building and charges the MPC fair-market rent.

Only if the clinic is structured badly. Physicians who bill through one shared corporation, a partnership or associated corporations split a single $500,000 small business limit. Where each physician keeps their own Medical Professional Corporation and shares rent, staff and software through a formal cost-sharing agreement, every physician keeps their full $500,000 limit. ZAI Wealth Management reviews the agreement with the physician's lawyer and accountant.

Not reliably. Eligible dividends require a General Rate Income Pool (GRIP) balance, which most Medical Professional Corporations taxed only at the small business rate do not have; paying eligible dividends without GRIP triggers a 20% penalty tax. Building a dividend-paying portfolio to create GRIP usually pushes passive income over the $50,000 clawback threshold. ZAI Wealth Management treats the tax-free dividend idea as a sales pitch, not a strategy.

Ordinary mutual fund trusts are. They distribute interest, dividends and realized gains every year on a T3 slip, which is taxed at roughly 50% inside the corporation and counts toward the $50,000 passive income threshold. ZAI Wealth Management favours corporate-class funds, low-turnover equity portfolios and, where it fits, an Individual Pension Plan, so growth is deferred until the physician chooses to realize it.

In ZAI Wealth Management's worked example, a British Columbia surgeon with $114,000 of passive income loses $320,000 of her $500,000 small business limit and pays about $48,000 more tax a year, because $300,000 of practice income is taxed at 27% instead of 11%. Bringing passive income back under $50,000 restores the full limit and the $48,000.

Three ways: optional EI special benefits for the self-employed, which must be registered for at least 12 months before claiming; the provincial medical association's parental leave program, which rarely covers overhead and household costs alone; and a corporate parental reserve built in the years before leave at the 9% to 12% small business rate, then paid out as steady monthly salary or dividends. ZAI Wealth Management builds the reserve into the physician's plan early.

No. Child care is claimed personally by the lower-income spouse, up to $8,000 per child under 7, $5,000 per child aged 7 to 16 and $11,000 per child eligible for the disability tax credit, capped at two-thirds of that spouse's earned income. Dividends are not earned income, so a physician paid only in dividends may be able to deduct nothing. ZAI Wealth Management's fix is enough T4 salary to create earned income.

By making the high-earning years count: leaving surplus inside the Medical Professional Corporation, building reserves before each leave so long-term savings are not drawn down, keeping a T4 salary every year so RRSP room, CPP and child care deductions survive, and using an Individual Pension Plan after about 40 for a faster catch-up than an RRSP alone. ZAI Wealth Management plans the full career rather than assuming a straight 35-year line.

Because there is no spouse to roll the shares to. On death the Medical Professional Corporation shares are deemed sold at fair market value, and the investments inside are taxed again when the executor pays them out, a double tax. The tools are post-mortem pipeline and loss carry-back planning, which need executor powers in the will, the capital dividend account for tax-free payouts, charitable gifts and a two-will structure where allowed. ZAI Wealth Management coordinates this with the physician's lawyer and accountant.