In Canada, many workers look forward to a Christmas bonus as a yearly “thank you” from their employer. But how do holiday bonuses actually work? Are they required? Are they taxable? And can your boss suddenly change or cancel a bonus you were expecting?
This simple guide breaks down Christmas bonus rules in Canada, including what’s taxable, what’s considered a true entitlement, and what to do if your employer refuses to pay a bonus you’ve regularly received in the past.
In most cases, no.
Employers in Canada aren’t legally required to provide a Christmas bonus — whether it’s cash, a gift card, or time off.
However, there are two important exceptions:
If your contract states that you’re entitled to a holiday or year-end bonus, your employer must pay it. This turns the bonus into a term of your employment, not a “gift.”
Even if your contract says nothing about bonuses, consistent past payments can create an entitlement.
For example:
If you’ve received a $1,000 Christmas bonus every year for several years, your employer may no longer be able to take it away without proper notice or compensation. Courts often view long-term, predictable bonuses as part of your overall compensation package.
Yes — most Christmas bonuses are taxable.
The Canada Revenue Agency treats bonuses as employment...
The lawyer representing former Michigan football coach Sherrone Moore alleged in court filings that accusations against Moore were part of a “litigation strategy designed to villainize Mr. Moore” ...