Whenever you get paid commissions as a self-employed agent, you have to pay a large percentage in taxes for the Canada Pension Plan (CPP). You cannot opt out of paying into this fund until you’re 65 years old.
By incorporating, you’ll be able to limit CPP contributions based on the salary you receive from your corporation. This can significantly reduce your tax bill. Also, if you end up saving a large portion of your earnings as a corporation, then you can defer a percentage of the tax you would have paid as a self-employed taxpayer. Essentially, the tax payment would be deferred to whichever year you draw the funds.