If I have a profit in my corporation, could I pay myself a dividends as well as my wife in case my wife as non-voting share holder, what is the tax rate for these dividends please?
Your company can pay dividends to you and your spouse so long as the articles of incorporation do not restrict dividend payments on the classes of shares issued to you and your spouse. Note that as of 2018, the federal government has placed restrictions on dividend payments made to family members who are shareholders of a Canadian private corporation. The restrictions are as follows:
1. Dividends can be paid to a family member (who is 18 or older) so long as the family member worked at least 20 hours per week consistently in the business, and the amount of the dividends paid is reasonable based on the complexity of the work and the number of hours worked. OR
2. Dividends can be paid to family members (who are 25 or older) who have made a substantial monetary contribution to the business.
The above restrictions do not apply to Canadian private corporations that derive less than 10% of their total income from selling services.
The amount of personal tax paid by you and your spouse on dividends received depends on your province of residence, your other sources of income in the year, and applicable tax credits and deductions in the year. Generally speaking, if you have no other source of income in the year, the first $35,000 of dividends received from a Canadian controlled private corporation are tax-free.