Christmas Bonus Canada: What Employees Should Know (2025 Guide)

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.

Are Christmas Bonuses Required in Canada?

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:

1. Your employment contract promises a Christmas bonus

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.”

2. A discretionary bonus becomes an established practice

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.

• See Also: Bonus Pay Ontario

Is a Christmas Bonus Taxable in Canada?

Yes — most Christmas bonuses are taxable.

The Canada Revenue Agency treats bonuses as employment income. That means:

• Cash bonuses → fully taxable
• Gift cards → usually taxable
• Non-cash gifts → may be taxable depending on value and frequency

Employers typically deduct income tax, CPP, and EI from cash bonuses just like a regular paycheque.

What is the Average Christmas Bonus in Canada?

There’s no universal industry standard, but most people see:

• $100 to $500 for general staff
• $1,000+ for long-term or senior employees
• Gift cards, profit-sharing, or extra time off in place of cash

Can My Employer Take Away My Christmas Bonus?

It depends.

Your employer can’t take it away if:

• Your employment contract guarantees the bonus, or
• You’ve received the same bonus every year for several years, creating a term of employment through past practice.

Your employer can take it away if:

• The bonus is genuinely discretionary, and
• There hasn’t been a consistent pattern of paying it, and
• Nothing in your contract says otherwise.

If you’re unsure whether your bonus is discretionary, speak to an employment lawyer before pushing the issue.

Can I Be Punished For Asking About a Christmas Bonus?

No.
Employers in Canada can’t punish, threaten, or discipline you for asking a reasonable question about your compensation.

Retaliation — like cutting hours, suspending you, or suddenly changing your job — may be considered a workplace reprisal, which can lead to a constructive dismissal claim.

Can I Be Fired For Asking For a Christmas Bonus?

Technically yes — non-unionized employees can be fired for almost any reason (termination without cause), as long as:

• The dismissal is not discriminatory, and
• The employee receives full severance pay.

Should Employers Offer a Christmas Bonus in Canada?

Many do — and for good reason.

Offering a year-end or Christmas bonus can:

• Improve morale during a stressful season
• Increase retention
• Reinforce a culture of appreciation
• Set employers apart during hiring
• Acknowledge a year of strong performance

Even a small gesture — like a prepaid gift card or extra paid day off — can have a meaningful impact.

What should you do if your Christmas bonus is suddenly cut or withheld?

If your employer refuses to provide a bonus you’re contractually or historically entitled to, here are the steps:

1. Review your employment contract — check for bonus terms
2. Check your past pay records — consistency matters
3. Document the conversation where the bonus was denied
4. Speak to an employment lawyer before taking any action

You may be owed:

• The bonus amount,
• Compensation for changes to your compensation structure, and
• Potentially severance if the employer fundamentally changed your terms of employment.

When to Contact Samfiru Tumarkin LLP

If your Christmas bonus has been reduced, taken away, or tied to unfair conditions, our team can help.
The employment lawyers at Samfiru Tumarkin LLP assist non-unionized workers across Ontario, Alberta, and BC with bonus disputes, reprisals, and all employment-related issues — including constructive dismissal and severance reviews.