How bonuses are taxed
A cash bonus is added to employment income for the year. It can increase federal and provincial income tax and, if you are still under the annual ceilings, CPP or QPP and EI (plus QPIP in Quebec).
Bonus Tax Calculator
A bonus is employment income. This calculator does not multiply the bonus by a flat tax rate. It runs the payroll engine on your salary, then on salary plus bonus, and shows the difference.
Withholding vs final tax
Employers often withhold tax on a bonus using a payroll method that can look harsher than the annual result. This page estimates the incremental annual liability, not the exact amount that will come off one bonus cheque.
Contribution ceilings
Once you have already reached the CPP/QPP or EI maximum for the year, extra bonus income should not create more of those contributions. The existing payroll engine already applies those ceilings.
Province bonus calculators
Frequently asked questions
How is the net bonus calculated?
Net bonus is estimated take-home on salary plus bonus minus estimated take-home on salary alone.
Will I pay more CPP or EI on a bonus?
Only if you have not already reached the annual maximums. High earners who have already maxed CPP/QPP and EI should see mostly income tax on the extra amount. Quebec also uses QPIP.
Why doesn’t this match my bonus cheque?
Employers withhold using payroll formulas that can differ from the final annual tax on the combined income. This page estimates the annual incremental effect.