Bonus Tax in Canada (2026): How Much Comes Off, by Province

Your bonus letter said $5,000. The deposit says $3,216. If you earn $60,000 a year in Ontario, that’s about what you’d get, and nothing went wrong. Income tax, CPP and EI took about 36% of it.

There’s no special bonus tax in Canada. A bonus just looks heavily taxed next to your paycheque. Your salary uses up the tax-free basic personal amount and the lowest tax bracket, so the income tax on it works out to about 14%. The bonus sits on top of all that, so it’s taxed at your highest rate.

Why does a bonus get taxed so much?

On a $60,000 salary in Ontario, your marginal rate (the rate on your last dollar of income) is 29.65% for federal and provincial tax together, before small credits for your CPP and EI. CPP takes another 5.95% and EI another 1.63%, until you hit the yearly maximum for each.

Here’s where a $5,000 bonus goes at that salary in 2026:

The CPP and EI amounts are just the 2026 CPP (opens in a new tab) and EI (opens in a new tab) rates applied to the bonus. The CRA’s payroll rules (opens in a new tab) say both come off bonuses, but they stop once you’ve paid the year’s maximum.

How payroll works out the tax

The CRA tells employers to use a bonus method (opens in a new tab). They add the bonus to your pay for the whole year, work out how much more tax you’d owe on that year of pay, and withhold that difference from the bonus. That’s why the bonus gets your top rate. The method treats it as the last money you earn.

There’s one exception. If your pay for the whole year, bonus included, is $5,000 or less, the employer withholds a flat 15% of the bonus in income tax instead (in Quebec, 10% for federal tax). That mostly applies to students and seasonal workers.

When payroll takes too much

If payroll adds the bonus to a regular paycheque and runs the usual formula instead, the tax jumps. That formula assumes every paycheque in the year looks like this one. In the Ontario example, the formula treats one $7,308 paycheque (the usual $2,308 plus the bonus) as if you got one every two weeks, which looks like a $190,000 salary. About $1,900 of income tax comes off the bonus instead of about $1,400.

You don’t lose that extra $500. It counts as tax already paid, and it comes back as part of your refund when you file. If your bonus deposit seems far smaller than the amounts in the table below, ask payroll how they taxed it.

How much of a $5,000 bonus do you keep in each province?

On a $60,000 salary, you keep between $2,850 and $3,320 of a $5,000 bonus, depending on where you live. On a $100,000 salary, you keep between $3,100 and $3,630. Quebec and the Atlantic provinces take the most at $60,000. Nova Scotia, Prince Edward Island and Manitoba take the most at $100,000.

We worked these out with 2026 federal and provincial tax brackets from the CRA’s payroll formulas (opens in a new tab) and Revenu Québec (opens in a new tab), and 2026 CPP, EI and Quebec payroll contribution rates. They assume one bonus paid in December and only the basic tax credits. Amounts are rounded to the nearest $10. You lose about the same percentage of a bigger or smaller bonus, unless it pushes you into the next bracket.

Why you keep more of a bonus on a bigger salary

At $100,000, you’ve usually paid the year’s maximum CPP and EI by the fall, so a December bonus has only income tax taken off. At $60,000, you haven’t, so CPP and EI take about 7.6% of the bonus. That 7.6% is more than the extra income tax on the bonus at $100,000, in every province.

If your bonus comes earlier in the year, CPP and EI do come off it even at a higher salary. You then hit the maximum sooner, and they stop coming off your paycheques earlier. Over the full year, you pay the same.

What’s different in Quebec

Quebec takes the biggest share at $60,000 because its provincial rate is 19% at that income and QPP costs more than CPP. The federal tax is lower, because Quebec residents get 16.5% off (opens in a new tab) their basic federal tax. QPP, Quebec’s version of CPP, is 6.3% instead of 5.95%, EI is 1.30% instead of 1.63%, and Quebec Parental Insurance Plan premiums add 0.43% on pay up to $103,000. Revenu Québec withholds Quebec tax with its own method.

Does a bonus push you into a higher tax bracket?

It can, but only the part of the bonus above the bracket line gets the higher rate. Your salary is taxed exactly as before. Canada’s tax brackets are marginal, so crossing one never raises the tax on the income below it.

Say your taxable income is $56,000 and a $5,000 bonus takes it to $61,000. The federal 20.5% bracket (opens in a new tab) starts at $58,523 in 2026. The first $2,523 of the bonus is taxed federally at 14%, and the other $2,477 at 20.5%.

Will you get some of the bonus tax back?

Only if more came off than you owe for the year. What payroll takes is an estimate, and your tax return settles it. If your employer used the bonus method and nothing else changes, expect little or nothing back. These are the usual reasons you’d get a refund:

• Payroll ran the bonus as a regular paycheque. The extra tax shown earlier comes back.
• You put money in an RRSP or FHSA. The deduction lowers your taxable income, and the tax you paid on that amount comes back.
• You changed jobs. Each employer takes CPP and EI up to the yearly maximum without counting what the other one took. You get the overpayment back (opens in a new tab) when you file (Quebec residents claim overpaid QPP on their Quebec return (opens in a new tab)).
• You earned less than payroll expected. If you left your job or took unpaid leave later in the year, your top rate ended up lower.

Our guide to what to do with a tax refund has ideas for the money once it arrives.

How can you keep more of your bonus?

Ask payroll to send part of it straight to your RRSP or FHSA. If you have room and your employer has reason to believe you can deduct it, no income tax comes off that part (opens in a new tab). CPP and EI still do. Revenu Québec (opens in a new tab) has the same rule for Quebec tax.

If your employer can’t send it to your RRSP

You can get the same result later. Put the money in an RRSP yourself by March 1, 2027, the end of the first 60 days of the year (opens in a new tab), and deduct it on your 2026 return. You pay the tax now and get it back in your refund. FHSA contributions count for the calendar year you make them, so for 2026 that means by December 31.

Which account fits depends on what the money is for. Our RRSP vs TFSA vs FHSA comparison covers it. A TFSA doesn’t lower the tax on your bonus, but what the money earns inside it is never taxed.

Where the rest of the bonus can go

A bonus that lands in December is easy to spend before January. Moving some of it into savings the day it arrives is the simplest way to keep it.

Lodavo rewards you for leaving it there. Connect your savings or chequing account to the free app, and the bigger your balance, the more free tickets you get for a weekly cash draw. At one ticket for every $25, leaving $1,000 of your bonus in savings gives you 40 tickets every week it stays there. Someone wins at least $100 every week, and prizes go up to $10,000. The money stays in your own account the whole time.

Get Lodavo free on the Apple App Store (opens in a new tab) or Google Play Store (opens in a new tab).

This article is general information, not tax advice. Your employer’s payroll team or a tax professional can tell you how these rules apply to your bonus.

Terms and conditions apply. No purchase necessary (alternate method of entry available). Skill-testing question required. Open to legal residents of Canada who are the age of majority. Odds depend on the number of eligible entries received. Full rules and odds at our contest rules.