Quote:
Originally Posted by Kjesse
Someone asked me via PM if you can split the severance payment and put some in an RRSP and take the rest and be taxed. The answer is yes, and I responded to you via PM I think (and maybe hit the send button too many times) but for the rest watching:
If you get a lump sum severance payment, the usual amount of taxes are not deducted. This is the formula from the CRA for what your employer has to remit:
https://www.canada.ca/en/revenue-age...-payments.html
That might help your or not at the time of payment, but at the time you file your tax return, you may have to make up the taxes or even get a refund, but at the most it will defer taxes that you will have to make up in the eventual tax filing.\
So if the lump taxed sum is over $15K, the employer must deduct 30% and remit it to the CRA. You might get that back, maybe not depending on your tax situation. The rule is old and needs adjustment. |
That's why my severance had so much tax taken off.