Employee RRSP contribution or cash bonus?

Discover the benefits of offering your employees an RRSP+ with the Fonds de solidarité FTQ employer contribution program instead of a cash bonus program 1.


Fonds de solidarité FTQ

Employee attraction and retention are at the heart of every employer's concerns. As a result, many employers—especially SMEs—want to enhance their benefits to not only meet their employees' needs, but also become more competitive on the market.

Rather than offering raises, some employers prefer to wait until the end of the year to pay employee bonuses based on their company's performance. However, there is a way to give your employees more while reducing your costs. Simply opt for the RRSP+ with Fonds de solidarité FTQ employer contribution program.

A worthwhile alternative to traditional bonuses

Generally speaking, companies that offer bonuses do so by paying their employees a lump sum at the end of the year. Since each employee's bonus must be added to their total salary to calculate applicable payroll taxes, they don't benefit from the full bonus amount. Plus, you end up spending more.

Fortunately, there is a solution that allows your employees to take full advantage of their bonus while also reducing your payroll costs. By setting up an RRSP+ with the Fonds contribution program for your employees, they'll not only benefit from your full employer contribution, but also receive the additional 30 percent tax savings 2 on this amount.

Planning to give each employee $1,000?

Here's a breakdown of the two scenarios 3.

Traditional payroll bonus

Employer contribution to the employee's RRSP+ with the Fonds

Amount offered to the employee



Employer's payroll taxes 4



Actual cost to the employer



Gross amount paid to the employee



Employee contributions (QPP, QPIP, and EI)



Tax savings


$300 2

Total gross profit for the employee



Did you know?

You can contribute to your employees' RRSP+ with the Fonds with every paycheque. Of course, you can vary the amounts for different employees, or choose a contribution amount based on your own pre-established criteria, such as job position or seniority. All this is optional and at your discretion.

These articles may be of interest to you

Benefits: What do employees in Quebec want?

Do you have to contribute to your staff's RRSPs?

Employer+ newsletter

Receive tips and tools that'll help you make decisions and manage your business.

We're here for you

Find the answers to your questions

Here, you'll find answers to frequently asked questions.

Talk to one of our agents

You can reach us at 1-888-385-3723, Monday to Friday, between 8:30 a.m. and 4:30 p.m.

Log in to the employers' extranet

You can manage all aspects of your company's payroll deduction plan online. A wide range of documents for you and your employees is also available on the employers' extranet.