Combined marginal rate = federal rate + Ontario rate at each income level, computed directly from 2026 bracket data (not a separately-maintained table). Source: Canada Revenue Agency – Canadian income tax rates for individuals and the provincial revenue agency, verified August 28, 2026.
Withholding vs Actual Tax
Salary
$10K Bonus Withheld
Actual Tax on Bonus
Refund
$60,000
$2,965
$2,965
$0
$80,000
$2,965
$2,965
$0
$100,000
$3,166
$3,010
$156
$120,000
$3,716
$3,716
$0
Withholding often exceeds actual tax — difference refunded at tax time
Strategies to Reduce Bonus Tax
1. RRSP Contribution
Bonus
RRSP Contribution
Tax Saved
Net Cost
$10,000
$10,000
$2,300-4,700
$5,300-7,700
Full bonus goes to RRSP, reduces taxable income
2. Direct-to-RRSP Transfer
Ask employer to deposit bonus directly to RRSP:
Approach
Tax Withheld
RRSP
Take-Home
Regular
$4,000
$0
$6,000
Direct to RRSP
$0
$10,000
$0
No withholding when employer deposits directly to RRSP
3. Charitable Donation
Bonus
Donation
Tax Credit
Net Cost of Giving
$10,000
$1,000
$450
$550
$10,000
$5,000
$2,400
$2,600
Bonus Timing Considerations
Timing Strategy
Benefit
Defer to next year
If income lower next year
Accelerate this year
If income higher next year
Split across years
Smooth out tax impact
Large Bonus Planning
$50,000 Bonus at $120,000 Salary
Strategy
Tax Bill
Take-Home
Take cash
~$18,780
$31,220
$18,000 to RRSP
~$11,911
$20,089 + RRSP
Split over 2 years
~$18,580
$31,420 total
CPP/EI on Bonuses
Component
Rate
Max
Applied to Bonus?
CPP
5.95%
~$4,066
Yes, until max
EI
1.63%
~$1,077
Yes, until max
If you’ve already hit the maximum CPP/EI for the year, no additional deductions on bonus.