As a Canadian physician preparing to welcome a new child, you’re not only entering a new chapter in life — you’re also navigating how to manage your finances and professional responsibilities during an extended leave. For incorporated physicians, the stakes are even higher, and the strategy more nuanced.
At Imperial Lifestyle Management, we specialize in building financial plans tailored to the unique lives of doctors. Here’s how to approach parental leave with foresight, discipline, and financial intelligence.
- Are You Eligible for EI Parental Benefits?
Many physicians are surprised to learn they may qualify for Employment Insurance (EI) maternity and parental benefits — but only if you’ve proactively opted into EI special benefits through Service Canada at least 12 months prior to taking leave.
If children are on your horizon within the next year or two, enrolling early could provide valuable support. At ILM, we help physicians evaluate whether opting in is a financially wise move.
- How You Pay Yourself Matters: Salary vs. Dividends
To qualify for EI benefits during parental leave, physicians must draw a salary — dividends do not count toward eligibility.
However, it’s common to want to minimize taxable income during leave. That’s where a well-balanced compensation strategy comes in: structuring the right mix of salary to access benefits, and dividends or retained earnings to preserve tax efficiency. As financial planners, we specialize in tailoring these plans to each physician’s long-term goals.
- Strengthen Your Corporation Before You Step Away
Your medical corporation doesn’t go on pause just because you do. It’s essential to set your practice up for stability and continuity during your absence. Key steps include:
- Building a cash reserve to cover recurring business costs
- Postponing discretionary purchases or upgrades until after leave
- Automating key functions like payroll and bookkeeping — or delegating them with trusted oversight
You’ll also want to consider whether hiring a locum is necessary and how that could affect HST obligations, billing, and corporate revenue.
- Plan Your Return — Not Just Your Departure
Your return to work comes with its own set of financial decisions. Once you’re back, you may want to:
- Catch up on RRSP or TFSA contributions
- Adjust your compensation structure
- Re-evaluate your overall financial plan
A lower household income during leave can also open opportunities for income splitting or other advanced strategies to reduce your tax burden for the fiscal year ahead.
Leave the Financial Planning to Us — Focus on What Matters
Parental leave should be about your family — not financial stress. Whether you’re already expecting or simply planning ahead, our team at Imperial Lifestyle Management will help you develop a personalized financial strategy that supports both your practice and your personal life.
Book a free 30-minute consultation today at imperiallife.ca .Let’s design a plan that grows with your family — and your future.
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