Personal Finance

What is the best way of getting perks in Ontario Canada without being taxed heavily from your employer for a 9-5 job ?

  • Last Updated:
  • Jan 31st, 2020 10:10 am
[OP]
Member
Apr 5, 2017
237 posts
37 upvotes

What is the best way of getting perks in Ontario Canada without being taxed heavily from your employer for a 9-5 job ?

What is the best way of getting perks or bonuses in Ontario Canada without being taxed heavily from your employer for a 9-5 job ? I'm getting bonuses and it taxed almost 50%, so what will be the best option as an employee when we look for a new job to get as perks to avoid this heavy taxes ? Kindly advice..... TIA
13 replies
Deal Expert
May 30, 2005
43130 posts
3662 upvotes
Richmond Hill
The higher than usual taxes on your bonus will be corrected when you file your taxes. This is because bonuses are often taxed as if you made that amount in a normal paycheque instead of taking into consideration what your annual salary actually is.
[OP]
Member
Apr 5, 2017
237 posts
37 upvotes
Jon Lai wrote: The higher than usual taxes on your bonus will be corrected when you file your taxes. This is because bonuses are often taxed as if you made that amount in a normal paycheque instead of taking into consideration what your annual salary actually is.
Do we have to manually correct this while doing our taxes or CRA take this into consideration as they have our T4's ?
Deal Fanatic
Nov 22, 2015
5442 posts
4730 upvotes
MK1986 wrote: Do we have to manually correct this while doing our taxes or CRA take this into consideration as they have our T4's ?
What? You just file your taxes as usual
Member
Aug 20, 2015
474 posts
255 upvotes
Toronto
Do you know how Ontario residents get taxed? You probably should review the link below and get a better understanding.

https://www.taxtips.ca/taxrates/on.htm

Just because you are getting "taxed" 50% on bonuses or perks as you say doens't mean that's how much you will actually be taxed by end of year. Most companies are pretty lazy with bonuses and just tax as if you were making that amount *26 so you end up getting taxed as if you were in the highest bracket. It will all balance out when you do your taxes for the year.
Deal Addict
Dec 4, 2016
1750 posts
801 upvotes
Benefits offered to all employees are often not taxed as regular income. Or you can join a start up that pays you in stock options, which might receive favorable tax treatments, depending on the government of the time you cash out your options.
Deal Addict
Apr 5, 2016
3945 posts
2567 upvotes
Calgary/Vancouver
Most companies let you put that bonus into your RRSP or their own sponsored pension plan. Some companies also lets you defer to next year. Might be a good or bad idea depending on your plans. I see some people do this and take a long unpaid vacation thus lowering your overall tax.
Current Fido customer.
Ex Koodo customer.
Deal Addict
User avatar
Nov 17, 2004
2466 posts
788 upvotes
MK1986 wrote: Do we have to manually correct this while doing our taxes or CRA take this into consideration as they have our T4's ?

Unfortunately this is pretty much the level of understanding that the average tax payer has in this country and that’s why during elections, uneducated voters are so easy to manipulate.

They should really teach simple taxation rules/processes in our public education system and parents should really educate their kids before they get their first jobs.
[OP]
Member
Apr 5, 2017
237 posts
37 upvotes
CensoredByRFD wrote: Unfortunately this is pretty much the level of understanding that the average tax payer has in this country and that’s why during elections, uneducated voters are so easy to manipulate.

They should really teach simple taxation rules/processes in our public education system and parents should really educate their kids before they get their first jobs.
Unfortunately I didn't study in Canada and my parents are not here to educate me now. But I will try to learn and teach my kids.
Thanks !
Deal Addict
User avatar
Nov 17, 2004
2466 posts
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MK1986 wrote: Unfortunately I didn't study in Canada and my parents are not here to educate me now. But I will try to learn and teach my kids.
Thanks !
Definitely do that! Because unfortunately our education system changes very slowly...and with the way our government is these days, usually changes by going backwards.
Deal Expert
May 30, 2005
43130 posts
3662 upvotes
Richmond Hill
MK1986 wrote: Do we have to manually correct this while doing our taxes or CRA take this into consideration as they have our T4's ?
When you do your taxes and add everything up, the amount owing will correct itself.
Deal Addict
Nov 8, 2017
1314 posts
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It all comes out in the wash when you do your return
Your assessment will be based on your yearly income , and deductions
Deal Addict
Jan 21, 2018
2162 posts
2075 upvotes
Vancouver
It will all come out the same in the end when you file your tax return and get a refund.

However, there is an alternative tax calculation method for exactly this situation that can reduce the amount of tax deducted up front on special bonuses. See: https://www.canada.ca/en/revenue-agency ... ounts.html

Unfortunately most employers use standardized payroll tax calculation systems that don't support alternative tax calculations, and they aren't willing to make special exceptions because that would add to the workload and responsibility of the accounting dept.

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