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corporate employer pays bonus to himself
12-26-2012, 09:06 PM
Post: #1
corporate employer pays bonus to himself
Hello all,

Would anyone please help with this?

I'd like to pay some cash to myself. I think bonus is good option.
I was using payroll deduction calculator on CRA website.

I am sure I has EI exemption on salary/commission/bonus as I am employer. But what about CPP. Should I choose exemption for CPP as well?

Thank you.

Shawn
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12-28-2012, 02:34 AM
Post: #2
RE: corporate employer pays bonus to himself
There is an annual maximum contribution rate. The maximum you can pay for the year 2012 is $2306.70 employee share. Since you are self employed, you will need to pay your employer share as well. Read below for more details.

The amount you contribute is based on your employment earnings. If you are self-employed, your contributions are based on your net business income (after expenses). You do not contribute on any other type of income, such as investment earnings. If, during a year, you contributed too much or earned less than a set minimum amount, your excess contributions will be refunded when you file your income taxes.

You make contributions only on your annual earnings between a minimum and a maximum amount (these are called your pensionable earnings). The minimum amount is frozen at $3,500. The maximum amount is adjusted each January, based on increases in the average wage. In 2012, the maximum amount is $50,100. The contribution rate on these pensionable earnings is 9.9%, split equally between you and your employer. If you are self-employed, you pay the full 9.9%. The maximum contribution for employers and employees in 2012 is $2,306.70 each. If you are self-employed, the maximum contribution is $4,613.40.

excerpt from:
http://www.netfiletaxservice.com/blog/cp...-for-2013/
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07-09-2015, 09:33 AM
Post: #3
RE: corporate employer pays bonus to himself
To Shawn,

I know this is well after the fact, but unless you're outside the age limits for CPP, generally, you must contribute to CPP, even if you are exempt from EI as a controlling-shareholder of a corporation for which you are employed with.

If you didn't provide for CPP, the government would have issued a PIER report and charge you the correct CPP with an amended T4 slip.
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