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Income-splitting Techniques

Income-splitting Techniques

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The following are examples of income-splitting techniques allowed in Canada:

  1. RRSP contributions can be made by the higher-income spouse into an RRSP registered in the lower-income spouse’s name.

  2. Any investments can be made by the lower-income spouse so that any earnings on these investments will then be taxed in the hands of the lower-income spouse.

  3. Self-employed individuals can income-split by paying their spouse or child. You may not need to pay Employment Insurance for employing family members.