Commissions, bonuses, tips and other income, are there deductions?
As an employer you are required by Revenue Canada to deduct EI and CPP on all income paid to the employee receiving additional pay such as commissions, bonus or other income revenue.
In regards to commissions, it is recommended that tax be deducted. However if your employee has expenses that can be used to lower their tax when filing their annual personal tax then you do not have to deduct tax. For your protection we recommend that you have on file a signed and dated letter from your employee requesting that no tax be deducted from their commissions,.
