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Bonus Tax Calculator

Enter your bonus, your salary and your province to see the federal and provincial tax, CPP and EI on your bonus, and what you keep.

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$

Before tax, without the bonus

Your bonus after tax

$3,140

You keep 63% of a $5,000 bonus

Tax and deductions
$1,860
Your bonus
$5,000
Where your bonus goes
  • You keep$3,140
  • Federal income tax$980
  • Ontario income tax$440
  • Ontario Health Premium$150
  • CPP$274
  • CPP2$16

What this means

A bonus isn’t taxed at a special rate: it’s taxed like the rest of your pay, at your top rate. Here that takes 37%, because the whole bonus sits on top of your salary.

Your employer works out the tax on a bonus with the CRA’s bonus method, which looks at your yearly income, so what’s taken off is usually close to what you’ll owe. If your employer can pay the bonus straight into your RRSP, no tax is withheld on it.

An RRSP contribution of the same amount gets back the tax on the bonus when you file.

Next step

Breakdown

Bonus$5,000
Federal income tax−$980
Ontario income tax−$440
Ontario Health Premium−$150
CPP−$274
CPP2−$16
You keep$3,140

Your year with and without the bonus

  • Take-home without the bonus$53,786
  • Take-home with the bonus$56,926
Assumptions in this estimate
  • Worked out for the whole year: the tax on your salary plus the bonus, minus the tax on your salary alone. What’s taken off on the day can differ a little, and is settled over the year or in your tax return.
  • Assumes employment income is your only income and you claim the basic personal amount and the Canada employment amount.
  • Tax is your estimated annual liability spread evenly across pay periods; your employer’s withholding (based on your TD1) can differ slightly.
  • CPP and EI are spread evenly too. In practice they stop once you reach the yearly maximum (EI at $68,900 of earnings, CPP at $74,600 and CPP2 at $85,000), so higher earners’ last paycheques of the year are larger.
  • From July to December 2026, employers in British Columbia, Newfoundland and Labrador and Prince Edward Island use catch-up rates for mid-year changes, so those paycheques differ slightly; the yearly total is the same.
  • The Canada Workers Benefit and other refundable benefits you claim on your return are not included.
  • The temporary federal top-up credit (2025–2030) only affects people with very large non-refundable credits and is not included.
  • The Ontario LIFT credit for lower-income workers is claimed on your tax return and is not included.
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What a bonus is taxed at

Your bonus is added to your income for the year, so it’s taxed at your top combined rate. In Ontario in 2026, for example, that’s about 28% to 30% on income between roughly $58,500 and $95,000, about 43% from roughly $117,000, and over 53% at the top, before CPP and EI. The calculator works out the exact figure for your province and salary.

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Frequently asked questions

How is a bonus taxed in Canada?

A bonus is taxed as employment income, at your combined federal and provincial marginal rate, with CPP and EI on top until you reach the yearly maximums. There's no special bonus tax rate.

How much tax is withheld from a bonus?

Employers usually use the CRA's bonus method. They work out the tax on your yearly pay with the bonus and without it, and withhold the difference, so what's taken off is usually close to what you'll owe when you file.

Can I avoid tax on my bonus?

You can defer it. If your employer pays the bonus straight into your RRSP, no tax is withheld, as long as you have RRSP room. You'll pay tax when you take the money out, usually in retirement at a lower rate.

Why does my bonus seem to have less CPP or EI taken off?

CPP and EI stop once you've paid the maximum for the year. If your salary already takes you past those limits, your bonus has no CPP or EI taken off at all.