Tax Deduction

Kyle12345 wrote: ↑ Hey guys,

Long story short, I am basically getting a lump sum payment of $7000 on my paycheck due to unused vacation and sick time from last year.

My employer refuses to put them on a separate paycheck so that I don’t get taxed heavily on it.

Are there any options for me to get the employer to reduce tax deductions in general so that I can even out the deductions eventually? Can I fill out a “Request to Reduce Tax Deductions at Source” for this amount?

Thanks in advance.

Kyle12345 wrote: ↑ Hey guys,

Long story short, I am basically getting a lump sum payment of $7000 on my paycheck due to unused vacation and sick time from last year.

My employer refuses to put them on a separate paycheck so that I don’t get taxed heavily on it.

Are there any options for me to get the employer to reduce tax deductions in general so that I can even out the deductions eventually? Can I fill out a “Request to Reduce Tax Deductions at Source” for this amount?

Thanks in advance.

mrct1944 wrote: ↑RRSP

ml88888888 wrote: ↑ You will pay the same total amt of tax eventually when you file your tax return. So if the deduction is too small, you will have to pay. Otherwise you will get a refund.

ssj4_ootaku1 wrote: ↑ Like others have said, you will eventually even out when you file your 2021 Income tax return.

For now, you can request your employer to take lower taxes, or pay the amount over several pay cheques.

But that depends on the employer, and may become an administrative burden, which they may decline.

taxrage wrote: ↑ It would be taxed less if it qualified as a bonus or something similar, and I understand not wanting to get a pay with an extra $7000 gross because of the way pay period income is treated, but I don't think there's much else you can do.

Kyle12345 wrote: ↑ Ah. So filling that request to reduce tax T1213 form for the lump sums can’t be used for this situation?

Kyle12345 wrote: ↑ Yah I understand about getting the money back eventually but I would rather not wait over a year until next year April to get it if possible.

taxrage wrote: ↑ I don't think so. I believe it's treated no differently than over-time. You can request that the tax on the lump-sum be reduced, but you have to have an offsetting deduction like RRSP, child care etc.

There was a good discussion about the treatment of lump-sum payments in /s/PersonalFinanceCanada on Reddit a while back. See: https://www.reddit.com/r/PersonalFinanc ... _employer/

ml88888888 wrote: ↑ If they are allowed to reduce your tax when the lump sum is paid to you, do you have the will to save some money for the extra tax you have to pay when your file your tax return next year(I.e. are you going to spend all money you get from your pay cheque and then you will be short of money to pay tax)?