For the year ending December 31. 2019, Jamal Ltd. has Taxable Income, before consideration of dividends or salary paid to its sole shareholder, of $190,000. The Company's cash balance is over $335,000. It is subject to a combined federal/provincial tax rate of 12.5 percent. Mr. Jamal, the only shareholder, has employment income of over $297,000 and, under normal circumstances, does not make withdrawals from the corporation. He needs an additional $18,250 in cash to pay the caterer for a big post Covid party. Mr. Jamal lives in a province where the provincial tax rate in his bracket is equal to 19 percent and the provincial dividend tax credit is equal to 23 percent of the dividend gross up for non-eligible dividends. He has asked your advice as to whether the payment of salary or, alternatively, the payment of non-eligible dividends, would have the lower tax cost.

Given his personal combined tax rate, how much does he have to receive in salary to have the required cash he is looking for?

What is the att tax cost of paying out the salary?