Tax on Extra Income
A bonus or commission cheque almost always comes back smaller than you expected. That's not a mistake — it's your marginal rate landing on top of the salary you already earn.
Everything in this section is employment income that arrives outside your regular wage, and it all shares one problem: what payroll holds back on the day rarely matches what the money actually costs you in tax. The gap closes when you file, but it can be a few thousand dollars wide in the meantime — which is why a bonus deposit so often looks wrong rather than merely small.
Two things sit just outside the category. A permanent salary increase isn't extra income, it's a new baseline, and it's priced on the pay raise calculator. Nor does any of this hold if you're not on a T4 — commission or fees billed as a contractor carry both halves of CPP, no EI, and expenses you can deduct, which is the self-employed tax calculator's job. For the tax on the base salary underneath it all, start with take-home pay.
The federal half of the arithmetic is the same in every province and territory. The provincial half is not, and it varies more than most people expect. Both calculators here cover all thirteen jurisdictions:
- Ontario adds two things no other province does — a surtax on provincial tax (20% above $5,818, a further 36% above $7,446) and the Ontario Health Premium, which steps up in bands. Extra income is precisely what pushes you over those thresholds, so an Ontario bonus can cost more than the headline bracket suggests.
- Quebec runs a separate system. QPP replaces CPP at a higher rate, QPIP premiums come off as well, and the federal EI rate drops to 1.30% because QPIP covers parental leave. Quebec also files its own provincial return.
- Everywhere else it's brackets alone — but where those brackets sit varies widely. The lowest band runs to $61,200 in Alberta and stops at $30,995 in Nova Scotia, so the same bonus on the same salary lands in a different place depending on the address.
Which calculator you want comes down to how the money arrives, not what it's called on the pay stub. Reach for the bonus calculator when it's a single payment on its own cheque — a year-end bonus, a signing bonus, a retention payment. Reach for the commission calculator when the money recurs and the amount swings; it also covers Form TD1X, the election that stops each cheque being withheld as though every month looked like that one. If your commission is a fixed amount paid alongside salary on a set schedule, either tool gives you the same annual answer — the difference between them is about withholding, not about the tax you finally owe.