10% on amounts up to and including $5,000;
20% on amounts over $5,000 up to and including $15,000; and
30% on amounts over $15,000.
Rates are different for the Province of Quebec.
Please consult CRA website for official information: Canada Revenue Agency: Withholding rates for lump-sum payments
CAUTION: Sage support can't assist with third-party products, hardware, report customizations, or state and federal tax questions. Refer to our Scope of Support for more info. Contact your Sage business partner, network administrator, or accountant for assistance.Canada Revenue Agency requires that all income be taxable including bonuses.
Workaround: I want the net to be the actual bonus (for example $500.00)
DocLink: How do I pay a bonus with the correct income tax withheld? For example using 27 or 53 pay periods instead of 26 and 52 respectivelyExample 1: for a 500$ bonus with applicable rates for July 2013
1.88% EI rate
4.95% CPP rate
10.0% Fed tax rate
16.83% total
100% - 16.83% = 83.17%
$500 / 83.17% = $601.18So, with a gross of $601.18
$11.30 EI
$29.76 CPP
$60.12 tax (10%)
$101.18 total
$601.18 - $101.18 = $500.00Example 2: for a $10,000 bonus with applicable rates for july 2013
$10000 / .7317 = $13,666.80
$256.94 EI
$676.51 CPP
$2733.36 tax (20%)
$3666.81 total
$13666.80 - $3666.81 = $9999.99Note1: CPP needs to be a manual calculation at 4.95% as there should be no use of the 3500 exemption amount
Note2: If there is a penny difference. Make a simple adjustment on one of the lines
Note3: If CPP, EI, or both are maxed out (or max out during the bonus cheque), verify the procedure with an accountant.
Note4: All these rates are for july 2013 and affect all provinces except for Quebec.