Christmas Bonuses: Payroll Expense and Taxable Income in Canada As the year comes to a close, many business owners like to reward their staff with a Christmas bonus. It’s a great way to recognize hard work and boost morale, but it’s also an area where we often see costly payroll mistakes. One of the most common issues? Paying Christmas bonuses without treating them as taxable payroll income or failing to report them on employees’ T4s. In Canada, this can lead to penalties, interest, and compliance problems with the CRA. Let’s break down how Christmas bonuses should be handled properly. Christmas Bonuses Are a Payroll…
