Ontario Corporate Tax: Worked Examples for Small Businesses
Worked examples of Ontario corporate tax at the combined 12.2% small business rate and 26.5% general rate, for $100k, $500k and $700k of income.
These examples assume a Canadian-controlled private corporation with active business income and the full $500,000 business limit. Rates: 12.2% small business, 26.5% general. See Ontario corporate tax rate.
| Taxable income | Small business portion | General portion | Approx. tax |
|---|---|---|---|
| $100,000 | $100,000 × 12.2% | — | $12,200 |
| $500,000 | $500,000 × 12.2% | — | $61,000 |
| $700,000 | $500,000 × 12.2% | $200,000 × 26.5% | $114,000 |
Remember
- Paying yourself salary or dividends shifts tax to your personal return.
- Large passive investment income or associated companies can reduce the $500,000 limit.
- These are estimates, not tax advice. Confirm with the CRA or an accountant.
Deadlines: T2 filing deadline.
Frequently asked questions
- How much tax does a corporation pay on $100,000 in Ontario?
- A CCPC with $100,000 of active business income eligible for the small business deduction pays about $12,200 (12.2%).
Official sources
- Ontario Business Registry ↗— file and search Ontario registrations
- Corporations Canada ↗— federal incorporation
- Canada Revenue Agency — business ↗— BN, HST, payroll, T2
Related articles
When an Ontario corporation must file its T2 corporate tax return, when the balance owing is due, and how to calculate both from your year-end.
GST/HST return and payment deadlines for Ontario businesses by filing frequency, including the June 15 rule for annual individual filers.
Understand the CRA $30,000 small supplier threshold in Ontario, when mandatory GST/HST registration triggers, voluntary registration benefits, and filing frequencies.
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