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| *The Commerce Journal>>>Canada Taxes |
Is vacation pay income taxed?if so should it come on a cheque separate from pay cheque? |
i want to collect it but if its added to my pay ill be taxed as tho it was regular pay right? Vacation pay is a standard deduction for most employees, based for most at 4%. Some contracts negotiate a higher rate. It is there, so when you take holidays you still have pay coming in and can enjoy your vacation. It is taxable, it is a regular not a special payment, so if it is paid with a regular paycheque it will most likely bump all of the other deductions, CPP , EI and tax. The best bet is to take it when you are supposed to, when there is no other income, when you are on holiday, that way you won't notice the taxes. yeah its taxed....and comes as a seperate check........for that week............ It is taxed. It comes on a regular paycheck, but itis probably shown as "vacation" or "other". If you receive a pay check for vacation time (in lieu of actually taking the time), then it will be added to the pay period that you received the money in. Since Canada has a progressive tax rate system, that will usually mean that you will pay a higher rate of tax on that vacation pay than you ordinarily do on your regular pay (unless you are already at the highest tax rate). If there is a discrepancy at the end of the year, CRA will refund the difference to you when you file your return. |
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