How much tax is taken off a bonus in Canada?

Your marginal rate, the same as a raise. On an $80,000 salary in Ontario, a $10,000 bonus is taxed at about 29.65%, plus any CPP and EI still owing. You keep roughly $6,900 to $7,000. There is no special bonus rate. It only looks higher on the cheque because withholding on a lump sum is worked out differently from regular pay.

Why was so much withheld from my bonus cheque?

Employers must use the CRA's bonus method. It taxes the bonus at your top rate, often 30% to 45%, and CPP and EI come off without the usual per-period exemption. If the bonus was added to a regular cheque instead, payroll taxed it as if you earned that every period. Any excess comes back as a refund when you file.

Can I avoid tax on a bonus?

You can defer it. Ask payroll before the bonus is paid to send it straight into a group RRSP or your own RRSP, up to your room, and no tax is withheld. Or ask to receive it in January if next year's income will be lower.

Do CPP and EI apply to bonuses?

Yes, at the normal rates until you reach the annual maximums. In 2026 those are $4,230.45 for CPP plus $416 for CPP2, and $1,123.07 for EI. If your salary already exceeds the ceilings, nothing more is taken.

Are commissions taxed differently?

No. Commissions are employment income, taxed the same way. The only difference is that self-employed commission salespeople can deduct expenses.

What about a signing bonus or retention bonus?

Same treatment. It is employment income in the year you receive it. If you repay it in a later year, you deduct the repayment that year (line 22900 or as a salary repayment). If your income is lower that year, the deduction may not fully offset the tax you paid.

Bonus Tax Calculator (Canada, 2026)

See how much of your 2026 bonus you keep after tax. It shows what your employer withholds and what comes back when you file. Send part of the bonus to your RRSP to see the tax you avoid. You can also compare your year with and without the bonus.

From a $10,000 bonus you get$6,894.30$3,106 goes to tax and CPP and EI. That is 31.1% of the cash part. The income tax alone is your 29.1% marginal rate. There is no special bonus tax.

You get $6,894Income tax $2,906CPP and EI $200

Taken off now vs what you really owe
If your employer uses the CRA bonus method (most do)	$2,905.70
If the bonus is lumped into a regular every 2 weeks cheque	$4,668.37
Real tax on the bonus (settled when you file)	$2,905.70
Refund when you file, if the second method was used	$1,762.67
CPP on the bonus	$200.00
EI on the bonus	None, you already hit the yearly maximum

Year with and without the bonus

	Salary only	Salary + bonus
Gross	$80,000	$90,000
Income tax	$14,128	$17,034
CPP and EI	$5,570	$5,770
Take-home	$60,303	$67,197
Average tax rate	17.7%	18.9%

Any extra tax taken off comes back when you file, usually within two weeks if you NETFILE. To keep the whole bonus working for you, ask payroll to put it into your group RRSP or your own RRSP (up to your room) before it is paid.

Show the math

Real tax = income tax on $90,000 minus income tax on $80,000, using 2026 Ontario brackets. So it includes any bracket you cross. The CRA bonus method annualizes your regular pay, adds the bonus, and taxes the difference. That lands close to the real figure. The periodic method treats the bonus as if you earned it every pay period. That takes too much off, and the difference comes back when you file. When your total pay for the year, bonus included, is $5,000 or less, the CRA has employers withhold a flat 15% (10% in Quebec) instead. CPP applies at 5.95% (plus 4% CPP2 between $74,600 and $85,000) and EI at 1.63% until you hit the yearly maximums.

How this calculator works

The tax on a bonus is the tax on your salary plus the bonus, minus the tax on your salary alone. The calculator uses the 2026 federal and provincial brackets, credits, surtaxes and health premiums. That is what you owe once you file, whatever the employer withheld.

CPP and EI come off at the normal rates until you reach the annual maximums. Past the ceilings, nothing more comes off.

Worked example: $80,000 salary, $10,000 bonus, Ontario

Line	Amount
Bonus	$10,000.00
Income tax at the marginal rate (29.1%)	− $2,905.70
CPP (CPP2 on earnings between $74,600 and $85,000)	− $200.00
EI	− $0.00
You keep	$6,894.30

Assumptions

Single employee with the basic personal amount. Bonus and salary are paid in the same tax year.
Payroll withholding may differ slightly from the true tax. The difference is settled on your return.

How to keep more of the bonus

Two forms tell your employer to withhold less at source, so the money is in your hands now instead of in a refund next spring.

Ask payroll to send part of the bonus straight to your group RRSP or to a personal RRSP with proof of room. No tax is withheld on that part.
If you expect a large refund every year (RRSP, childcare, support payments), file form T1213 so the CRA authorises lower withholding on every cheque.Form T1213, request to reduce tax deductions at source ↗
Update your TD1 with your employer if your credits changed (new spouse, disability, tuition).TD1 personal tax credits return ↗

Common questions

Frequently asked questions

How much tax is taken off a bonus in Canada?: Your marginal rate, the same as a raise. On an $80,000 salary in Ontario, a $10,000 bonus is taxed at about 29.65%, plus any CPP and EI still owing. You keep roughly $6,900 to $7,000. There is no special bonus rate. It only looks higher on the cheque because withholding on a lump sum is worked out differently from regular pay.
Why was so much withheld from my bonus cheque?: Employers must use the CRA's bonus method. It taxes the bonus at your top rate, often 30% to 45%, and CPP and EI come off without the usual per-period exemption. If the bonus was added to a regular cheque instead, payroll taxed it as if you earned that every period. Any excess comes back as a refund when you file.
Can I avoid tax on a bonus?: You can defer it. Ask payroll before the bonus is paid to send it straight into a group RRSP or your own RRSP, up to your room, and no tax is withheld. Or ask to receive it in January if next year's income will be lower.
Do CPP and EI apply to bonuses?: Yes, at the normal rates until you reach the annual maximums. In 2026 those are $4,230.45 for CPP plus $416 for CPP2, and $1,123.07 for EI. If your salary already exceeds the ceilings, nothing more is taken.
Are commissions taxed differently?: No. Commissions are employment income, taxed the same way. The only difference is that self-employed commission salespeople can deduct expenses.
What about a signing bonus or retention bonus?: Same treatment. It is employment income in the year you receive it. If you repay it in a later year, you deduct the repayment that year (line 22900 or as a salary repayment). If your income is lower that year, the deduction may not fully offset the tax you paid.

Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.

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Data verified for tax year 2026: September 7, 2026 Updated September 7, 2026 By Nishant Malik, founder of GlassLayer