One of the biggest decisions for incorporated chiropractors is how to pay themselves. It seems simple—take money from the corporation and use it to fund your lifestyle—but without a plan, that approach can quietly cause financial chaos.
Many chiropractors treat their corporation like an ATM: pulling out money as needed, without clear structure or strategy. It works for a while, but over time it leads to unpredictable income, surprise tax bills, and unnecessary stress. Paying yourself like a professional means creating a system that balances tax efficiency with financial stability—today and 30 years from now.
When you draw from your corporation on an as-needed basis, you’re effectively guessing your income. These random draws make it difficult to know how much you’re earning, what your tax bill will be, or how much you can safely save and invest.
The result?
If you’re using your corporation like an ATM, the first step is awareness. The second is structure.
A common side effect of the ATM approach is what’s known as the dividend tax trap. Here’s how it happens:
You continuously pull money out of your corporation as dividends throughout the year. The CRA expects quarterly installment payments based on your historical income, but if you take out more than usual, your installments no longer cover the tax owing.
At tax time, you get hit with an unexpected bill—say, $50,000. You take that money from your corporation to pay the tax, but that new withdrawal increases your income again, triggering even more tax the following year. The cycle repeats itself until you feel like you’re running in circles.
How to avoid it:
If you draw dividends, set aside roughly 30–40% of each withdrawal into a separate “tax account” and treat that money as untouchable. That simple discipline prevents tax panic later.
When your income is steady, everything else becomes easier—budgeting, saving, and investing. Whether you pay yourself via salary, dividends, or a mix of both, the key is consistency.
Setting up a fixed monthly transfer from your corporation to your personal account gives you the stability to:
It also aligns perfectly with the Profit First approach—allocating a set percentage of revenue to owner’s pay and keeping finances predictable, regardless of how your collections fluctuate month to month.
One of the most common pieces of advice chiropractors hear from accountants is: “Just take what you need and leave the rest in the corporation to keep taxes low.”
While that may minimize this year’s tax bill, it doesn’t necessarily build wealth. In fact, it can cost you more in the long run.
When you take minimal income, you may:
Your accountant’s goal is often to minimize this year’s taxes. Your goal should be to minimize lifetime taxes. Those two objectives are not the same.
Many incorporated professionals avoid paying themselves a salary because they don’t want to pay into the Canada Pension Plan (CPP). But CPP is not a tax—it’s a contribution toward a government-backed, inflation-adjusted lifetime income stream.
If you pay yourself salary up to the annual YMPE (Year’s Maximum Pensionable Earnings—about $68,500 in 2025), you’ll contribute roughly $8,200 between the employer and employee portions. That $8,200 buys you a predictable benefit later in life—one that keeps pace with inflation and doesn’t depend on investment markets.
Think of CPP as part of your long-term income plan, not just a deduction on your paycheque.
Paying yourself a salary also creates Registered Retirement Savings Plan (RRSP) contribution room—something dividends do not provide.
RRSPs allow your investments to grow tax-deferred until withdrawal, often at a lower marginal rate in retirement. They also provide an immediate tax deduction when you contribute. Over decades, that combination of compounding and tax deferral can add hundreds of thousands of dollars to your net worth.
When used correctly—alongside TFSAs and corporate investments—RRSPs remain one of the most efficient long-term wealth-building tools available to incorporated chiropractors.
Relying solely on your corporation for wealth building means all your assets sit in one tax “bucket.” That’s risky.
Tax rules change. Provincial rates shift. Governments update the Income Tax Act. If 90% of your wealth is trapped inside your corporation and tax laws become less favorable, there’s little you can do to pivot.
Diversifying across different account types—corporate, RRSP, TFSA, and CPP—creates flexibility. In retirement, you can pull from different sources depending on tax rates, keeping your overall tax bill lower and your cash flow more predictable.
Real financial planning looks 30 years ahead, not just 12 months.
It’s easy to ask, “How do I minimize my taxes this year?”
A better question is, “How do I minimize my taxes over my lifetime?”
A proper long-term plan considers how your income strategy today affects your retirement income, investment growth, and estate planning decades from now. It also accounts for when it may make sense to switch from salary to dividends—or vice versa—as your business matures or you near retirement.
The strategy that’s right for you at 35 may not be the same one that’s right at 60.
Paying yourself from your professional corporation isn’t just a tax decision—it’s a wealth-building decision. The right mix of salary and dividends depends on your income level, goals, and stage of practice, but the principle remains the same: structure beats spontaneity.
If you haven’t run a 30-year salary-versus-dividend projection, you don’t yet have the full picture. The best outcome isn’t the lowest tax bill this year—it’s the greatest financial freedom over your lifetime.
Financial Advisors for Chiropractors
You’ve mastered aligning the body. What would it feel like to bring that same mastery to your money?
Where chiropractors get real answers, clear systems, and financial peace of mind
© Chiro Money Show. All Rights Reserved. Designed by Converting Attention.