Individual Pension Plans (IPP)
July 5, 2023
Dramatically boost your retirement assets with tax-deductible corporate contributions
How an Individual Pension Plan (IPP) works
An IPP is a tax-deferred savings vehicle used to invest and save for retirement. Contributions are tax-deductible and made directly from the corporation. Similar to an RRSP, the assets inside an IPP are tax-deferred until withdrawn, at which time they are treated as income.
How much can be contributed to an Individual Pension Plan?
Who is a good candidate for an Individual Pension Plan?
Business Owner
Registered Professional
Middle Aged Adult
T4 Earnings of $100k+*
*an IPP can be established for someone with lower earnings
Case Study
A business owner, aged 55, incorporated for 24 years, maximum T4 earnings of $178,600 with a current RRSP balance of $291,866.
- $156,600 in immediate past service funding, tax-deductible to the company
- $221,700 in qualifying transfer (from existing RRSP balance)
- Up to $446,211 more in tax-deductible contribution room over working years (excluding past service)
- The IPP balance could be up to $1,306,700 more than the RRSP balance
All the above figures are based on 2022 prescribed assumptions.
Advantages of an Individual Pension Plan
- Increased tax-deductible contribution room – up to 65% more than an RRSP
- Can reduce passive income in corporation
- Tax-deductible company contributions for prior years (past service)
- Richest benefit plan in Canada – 2% defined benefit pension plan
- All costs are tax-deductible to the company
- Creditor protection
- Increased corporate and personal tax savings
- Can include employed family members and pass on wealth to the next generation
Next Steps
Contact a Ward & Uptigrove Wealth Management representative at 519-291-3040 or email info@w-u.on.ca to learn more.
On November 4, 2025, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, presented Budget 2025 – Canada Strong, to the House of Commons. No changes were proposed to personal or corporate tax rates. Some highlights include the following: Some highlights include: A. Personal Measures Automatic tax filings for low-income Canadians to commence for the 2025 tax year. A 5% credit for eligible personal support workers working for eligible health care establishments. B. Business Measures A variety of new and extended measures for accelerated CCA on asset acquisitions. An anti-avoidance measure to prevent tax deferrals related to refundable dividend tax where dividends are paid within a corporate group. Various modifications to tax incentives related to the clean economy. C. International Measures Revisions to the transfer pricing rules and requirements.
Our team has assembled the most relevant and recent tax, business and agriculture updates for you in this season's newsletter.
As we near the end of Tax Season, please note our office hours below: Hours until April 29th Mon, Tues, Weds, Fri: 8:30 am - 5:30 pm Thursday: 8:30 am - 8:00 pm Saturday: 9:00 am - 12:00 pm Sunday: Closed Hours on April 30th 8:30am – 5:00pm Hours May 1st – May 2nd Closed Hours beginning May 6th Monday – Thursday: 8:30am – 5:00pm Friday: 8:30am – 4:30pm
