[gigantor]

In Canada, the minimum wage + large dividend payment system is allowed and encouraged. Encouraged because it's a transparent way of declaring your income and earnings without using any complex loopholes to bypass the system. Encouraged because:

1) Having your own company is more risky as opposed to a Permanent employee role in the government's eyes, hence more opportunities to pay less taxes

2) Companies are far more likely to work towards creating employment than individuals working for companies, benefiting the economy

3) Dividend income is taxed at a reduced bracket to stimulate investment, regardless whether you're investing in your own company or getting dividends from a large public corporation by being a shareholder

10 years of filing corporate taxes, having every accountant follow this practice, and an official audit with no complaints shows the Canadian Revenue Agency has no issues with this system.

[sparkie]

Hey, thanks for your input. The Canadian system seems similar to the UK. Every accountant is doing this, but there just doesn't seem to be an openness about it. It seems you only know how to do this if you're an accountant, or know an accountant - which was the point I was trying to get across in my original post - you aren't told this in school - they only tell you how to get a job, where none of it applies.

[mibbitier]

It's extremely open. If you're in the position of running a company, either you find out it's a good idea, or you get an accountant, who will tell you it's a good idea.

Sure, they don't teach you it at school, because most people at school won't start their own companies.