Management bonuses must be paid within 179 days from your year-end date and their relevant payroll remittances paid accordingly. If bonus and payroll deductions are not paid within this time frame, Canada Revenue Agency (CRA) can reassess the return in which the bonus was recorded, denying the deduction, resulting in taxes, penalties and interest. For example, if you have a March year-end date and you declare a management bonus, the bonus must be paid by September of the same calendar year. The result is that you get the extra salary expense in that corporate year-end so will pay less corporate taxes, but you must claim the salary as personal income in that same calendar year and pay the personal income taxes. So there is no deferral of taxes. However, if the corporation has a July or later year-end, you would not have to pay the bonus until the following calendar year. Thus you would have deferred the personal taxes into the next year. So for example, a corporation with a July year-end declares a bonus of $100,000. As this is a deductible expense, a BC corporation (CCPC) would be saving tax at 13.5% or $13,500. The bonus is actually paid on January 26, 2017, pushing the personal taxes into 2017. You have also deferred paying the payroll taxes for 6 months. It is best to keep a reconciliation of what was declared as a bonus by the corporation each year as compared to what was reported on the T4 slip to ensure that all bonuses are paid out on time and captured on the annual T4 slip.