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Ontario bonus tax calculator 2026
See how much of a bonus you keep in Ontario in 2026. The tool compares your tax with and without the bonus, including the CPP, CPP2 and EI it triggers, and explains why the amount withheld is not a separate tax rate.
An illustration of a bonus splitting into tax, contributions and net pay, not your result.
Visual labels: Bonus; Income tax; CPP and EI; What you keep.Your scenario
Amounts are displayed in CAD for the 2026 tax year, for an employee who lives and works in Ontario.
- Gross bonus
- $10,000.00
- Extra federal and Ontario income tax
- $2,905.70
- Extra CPP
- $0.00
- Extra CPP2
- $200.00
- Extra EI
- $0.00
- Income tax as a share of the bonus
- 29.06%
- All deductions as a share of the bonus
- 31.06%
With total pay of $5,000.00 or more, the CRA’s bonus method has an employer withhold roughly this extra income tax, about $2,905.70 here, so the cheque and your final tax are usually close. Your return decides the final amount.
Calculated on this device. These inputs are not submitted to Sora.
How the calculation works
Extra tax on the bonus = tax on (salary + bonus) − tax on salary alone, using 2026 federal and Ontario rates, with the same comparison for CPP, CPP2 and EI. Bonus after tax = bonus − extra income tax − extra CPP, CPP2 and EI − any part paid into your RRSP. The CRA’s method for an employer is the same idea: for a single bonus when pay for the year is more than $5,000, the employer spreads the bonus over the year’s pay periods, finds the extra income tax in the withholding tables and multiplies it back up. When pay for the year, after allowed deductions such as RRSP contributions, is less than $5,000, the employer withholds a flat 15%.
A worked example
At an illustrative salary of $80,000 and a $10,000 bonus, the extra income tax is $2,905.70. CPP and EI add nothing because the salary already reaches those annual maximums, but the bonus lifts CPP2 from $216.00 to $416.00, an extra $200.00. The bonus after tax is $6,894.30, so about 31% of it goes to tax and contributions. The same bonus on a $40,000 salary would also carry CPP and EI, because those caps have not been reached.
Assumptions and limits
There is no single tax rate for bonuses. What is withheld is an estimate of the extra tax, and your tax return settles the real amount, so you may get a refund or owe a little. The result depends on your other income, your credits, your RRSP room and whether the bonus is paid in the same calendar year. CPP is withheld on a bonus paid separately without the basic exemption, and CPP and EI stop at their annual maximums, so the cheque you see can differ from this annual comparison. Certain retroactive lump-sum payments for earlier years can qualify for a special calculation on your return, which the tool does not model. It also leaves out the credits on your TD1 forms, benefit premiums, pension contributions and taxable benefits. An employer’s payroll software is the authority for what is deducted.
General educational information. Inputs stay on this device and are not submitted. Confirm the assumptions before using a result in a business decision.
Source and further reading
2026 figures and the CRA bonus method checked October 24, 2026 against the CRA pages: CRA: Employers’ guide, payroll deductions and remittances (T4001), bonuses, retroactive pay increases or irregular amounts; CRA: tax rates and income brackets for 2026; CRA: T4127 payroll deductions formulas (federal and Ontario amounts, surtax and Health Premium); CRA: CPP2 contribution rates and maximums; CRA: EI premium rates and maximums. The examples above use Sora’s own illustrative figures.
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