Calculate your corporation's General Rate Income Pool balance.
Tax Year Income Data
Line 400 of T2 Return.
Amount benefiting from Small Business Deduction.
Passive income (interest, royalties, etc.).
GRIP Continuity
Balance at the end of the previous tax year.
Eligible dividends received from other corporations.
Eligible dividends paid out in the previous tax year.
Calculation Results
General Rate Income (GRI):$0.00
GRIP Addition (72% of GRI):$0.00
Opening Balance:$0.00
Plus: Dividends Received:$0.00
Less: Dividends Paid:$0.00
Closing GRIP Balance:$0.00
function calculateGRIP() {
// 1. Get input values
var taxableIncome = parseFloat(document.getElementById('taxableIncome').value) || 0;
var sbdIncome = parseFloat(document.getElementById('sbdIncome').value) || 0;
var aii = parseFloat(document.getElementById('aii').value) || 0;
var openingGrip = parseFloat(document.getElementById('openingGrip').value) || 0;
var eligibleDivReceived = parseFloat(document.getElementById('eligibleDivReceived').value) || 0;
var eligibleDivPaid = parseFloat(document.getElementById('eligibleDivPaid').value) || 0;
// 2. Logic for General Rate Income (GRI)
// GRI = Taxable Income – Income claimed for Small Business Deduction – Aggregate Investment Income
var gri = taxableIncome – sbdIncome – aii;
// Ensure GRI is not negative for calculation purposes
if (gri < 0) {
gri = 0;
}
// 3. Calculate GRIP Addition (Standard factor is 0.72 for 2012+)
var gripFactor = 0.72;
var gripAddition = gri * gripFactor;
// 4. Calculate Closing GRIP
// Formula: Opening + Addition + Received – Paid
var closingGrip = openingGrip + gripAddition + eligibleDivReceived – eligibleDivPaid;
// 5. Formatting function for currency
var formatter = new Intl.NumberFormat('en-CA', {
style: 'currency',
currency: 'CAD',
minimumFractionDigits: 2
});
// 6. Output results
document.getElementById('resGRI').innerHTML = formatter.format(gri);
document.getElementById('resAddition').innerHTML = formatter.format(gripAddition);
document.getElementById('resOpening').innerHTML = formatter.format(openingGrip);
document.getElementById('resReceived').innerHTML = formatter.format(eligibleDivReceived);
document.getElementById('resPaid').innerHTML = formatter.format(eligibleDivPaid);
document.getElementById('resClosing').innerHTML = formatter.format(closingGrip);
// 7. Show results section
document.getElementById('resultsSection').style.display = 'block';
}
What is the General Rate Income Pool (GRIP)?
The General Rate Income Pool (GRIP) is a tax mechanism used by Canadian Controlled Private Corporations (CCPCs) to track income that has been taxed at the general corporate rate rather than the lower small business rate. This tracking is essential for the integration of the corporate and personal tax systems.
When a corporation pays tax at the higher general rate, it adds to its GRIP balance. This allows the corporation to pay out "Eligible Dividends" to its shareholders. Eligible dividends come with a higher dividend tax credit for the individual shareholder, resulting in lower personal tax compared to non-eligible dividends.
How is GRIP Calculated?
The calculation of the GRIP balance is generally performed at the end of the tax year. The formula typically follows these steps:
Start with the Opening Balance: The GRIP balance carried forward from the previous tax year.
Add 72% of General Rate Income: This is calculated by taking the corporation's taxable income and subtracting any income that benefited from the Small Business Deduction (SBD) and Aggregate Investment Income (AII). The 72% factor (applicable from 2012 onwards) represents the after-tax portion of income taxed at the general rate.
Add Eligible Dividends Received: Any eligible dividends the corporation received from other corporations are added to the pool.
Subtract Eligible Dividends Paid: Dividends designated as eligible and paid out to shareholders in the previous year reduce the pool.
Why is Aggregate Investment Income (AII) Excluded?
Aggregate Investment Income includes passive income sources such as interest, rent, and royalties. This income is subject to a different refundable tax regime (RDTOH) and is generally not included in the General Rate Income Pool. Instead, passive income typically allows for the payment of non-eligible dividends, unless it was specifically generated from active business activities taxed at the general rate.
The Importance of Designation
To pay an eligible dividend, a corporation must designate the dividend as "eligible" in writing to the shareholder. However, a corporation must ensure it has a sufficient GRIP balance. If a corporation pays more eligible dividends than its GRIP balance allows (an "excessive eligible dividend designation"), substantial penalty taxes can apply under Part III.1 of the Income Tax Act.
Using This Calculator
This tool helps estimate the closing GRIP balance based on your corporate tax data.
Taxable Income: Enter the total taxable income from Line 400 of the T2 return.
Income Eligible for SBD: Enter the amount of active business income claimed for the small business deduction (usually up to $500,000).
Eligible Dividends: Ensure you accurately track dividends received from connected corporations and dividends paid to your own shareholders.
Note: This calculator uses the standard 72% General Rate Factor applicable to most CCPCs for years after 2011. Tax laws are subject to change, and specific situations (such as amalgamations or wind-ups) may require complex adjustments. Always consult a corporate tax accountant for filing purposes.