Is my salary from my own Ontario corporation tax-deductible for the corporation?

Yes, a salary paid to a shareholder-employee is generally deductible as a business expense for the corporation, reducing its taxable income. This is one reason salary is tax-efficient at the corporate level — it shifts the income from the corporation to your personal hands, where it may be taxed at a lower marginal rate if you are not in the top bracket.

The salary must be reasonable. Under the Income Tax Act, a deduction for amounts paid to persons who do not deal at arm's length with the corporation is limited to what would be reasonable in the circumstances. For an owner-manager who is genuinely running the business, paying yourself a market-rate salary for the work you perform is generally accepted. An inflated salary paid purely to shift income can be challenged by the CRA.

There is no requirement that an owner-manager pay themselves a salary at all — some choose dividends only — but salary is the primary mechanism for creating RRSP room and building CPP entitlement. If you want the corporate deduction plus personal RRSP room, salary is the tool. Keep documentation of your role and responsibilities to support the reasonableness of the amount.