If your spouse or common-law partner or dependants are actively involved in your business, pay them a reasonable salary. This allows you to split income with them and have their income taxed in the lower tax brackets. In addition, allocating a salary to your actively involved family members allows them to participate in the Canada Pension Plan and earn RRSP contribution room.
If you are self-employed, or are required to maintain your own office as an employee, consider having your lower income spouse or common-law partner provide and charge you for rental of office space, secretarial services, and janitorial services. This allows you to move income from your higher tax bracket to your spouse’s or common-law partner’s lower tax bracket. Note that the amounts charged must be reasonable, and your spouse or common-law partner must also be an owner of the property.
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