Owner pay sits on top of a payroll you already run
Adding the owner to an existing guard payroll is administratively trivial, which tempts people to default to salary without doing the arithmetic. Salary creates RRSP room and CPP entitlement, but in this industry it also stacks onto an Ontario payroll that may already be past the Employer Health Tax exemption, so each owner dollar can carry EHT at up to 1.95 percent on top of CPP. Dividends skip both, build no RRSP room, and shift the tax to the personal return at different rates.
The right mix is not a rule of thumb; it is a calculation off your actual payroll position, the corporation's income against the $500,000 small business limit and what you need personally. We run it every year through Tax Planning & Advisory, and the T2 then simply records what was decided.
Family in the business, with the schedule as evidence
Dispatch, scheduling, invoicing and licence tracking are real jobs, and guard companies often fill them with family. Dividends to a family member fall under TOSI, the tax on split income, at top rates unless an exclusion applies, and the practical one is the excluded-business test: actively engaged on a regular basis, with an average of 20 hours a week as the bright line. The useful twist here is that your scheduling platform already logs who worked and when, so the evidence CRA would ask for is a report you can print. Reasonable wages for real work stand on their own; dividends need the hours behind them.
The patrol fleet: buy, lease or pay per kilometre
Mobile patrol is a vehicle business on the side, and each acquisition route has different tax mechanics. A corporate purchase goes into Class 10 at 30 percent declining balance, with an HST input tax credit and operating costs deducted as incurred, but a passenger vehicle above CRA's cost ceiling lands in Class 10.1, where the deduction is capped and no terminal loss is allowed on disposal. A patrol unit that rotates among guards and stays in service is one thing; the owner's SUV that goes home every night invites a standby charge as a taxable benefit.
| Route | How the deduction works | What to watch |
|---|---|---|
| Corporation buys | Class 10 CCA at 30 percent, ITC on purchase, operating costs deducted | Cost ceiling pushes it to Class 10.1; personal use triggers a standby charge |
| Corporation leases | Lease payments deducted within CRA's limits | Deduction caps on higher-end vehicles; buyout decisions at term |
| Own car, per-km allowance | Company deducts a reasonable per-kilometre allowance, tax-free to the driver | A logbook is the whole defence; flat car allowances are taxable |
Timing levers the calendar hands you
A corporation chooses its fiscal year-end, and a guard company can point it away from contract-renewal season so planning happens when someone has time to think. A bonus accrued at year-end is deductible in that year provided it is paid within 180 days, which lets profit land where the rate is lowest without cash leaving early. Fleet additions only earn CCA once available for use, so a January delivery deducts a year later than a December one. And cash stockpiled for contract-onboarding gaps should be held deliberately: once passive investment income passes $50,000, it starts grinding the small business limit, so working capital and investment portfolio need to be two different decisions.
Planning as a rhythm, not a rescue
We review guard-company files before year-end, price the options in writing and leave a short list of decisions with deadlines attached. If a choice is bigger than tax, structured like our decisions work, we model it. Everything is quoted in writing after a free 15-minute discovery call, so the fee is known before the work starts.
