Ontario Bonus Tax Calculator 2021
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Reviewed by Calculator Editorial Team
Use this Ontario Bonus Tax Calculator 2021 to determine how much bonus tax you owe based on your total income and deductions. The calculator follows the 2021 tax rules for Ontario residents.
How the Ontario Bonus Tax Works
The Ontario Bonus Tax is a progressive tax applied to bonuses earned by employees in Ontario. The tax rate depends on your total income for the year, including your base salary and any other income.
Tax Brackets for 2021
| Total Income | Bonus Tax Rate |
|---|---|
| $0 - $44,700 | 0% |
| $44,701 - $89,404 | 10% |
| $89,405 - $150,000 | 15% |
| $150,001 - $220,000 | 20% |
| Over $220,000 | 26% |
The bonus tax is calculated on the portion of your bonus that exceeds your base salary. For example, if you earn $50,000 in salary and receive a $10,000 bonus, only the $10,000 bonus is subject to the bonus tax.
How to Calculate Your Bonus Tax
To calculate your Ontario bonus tax for 2021:
- Determine your total income for the year (salary + other income).
- Identify the portion of your bonus that exceeds your base salary.
- Apply the appropriate bonus tax rate based on your total income.
- Calculate the tax owed on the taxable portion of your bonus.
Formula
Bonus Tax = (Bonus Amount - Base Salary) × Bonus Tax Rate
Where Bonus Tax Rate is determined by your total income.
Use the calculator on the right to perform this calculation quickly and accurately.
Worked Examples
Example 1: Low Income
Total Income: $40,000
Base Salary: $35,000
Bonus: $10,000
Taxable Bonus: $10,000 - $35,000 = $0 (no taxable bonus)
Bonus Tax: $0
Example 2: Medium Income
Total Income: $90,000
Base Salary: $60,000
Bonus: $20,000
Taxable Bonus: $20,000 - $60,000 = $0 (no taxable bonus)
Bonus Tax: $0
Example 3: High Income
Total Income: $180,000
Base Salary: $120,000
Bonus: $50,000
Taxable Bonus: $50,000 - $120,000 = $30,000
Bonus Tax Rate: 20%
Bonus Tax: $30,000 × 20% = $6,000