At work, we have two ways of taking this: either take the payout as cash (pay about 40-50% taxes up front), or put it into a RRSP account. Downside is that the RRSP is a short list (not the greatest ROI -- return on investment).
However, ALL (emphasis) of the funds do go into the RRSP rather than trying to claim some of the deducted funds back at tax time.
Since I need to ratchet up my savings, putting all of the bonus into the RRSP is worthwhile as I can always withdraw some later and pay less taxes too!
Right now, I'm putting away $205.76 a pay into employee share ownership (don't panic because the stock market is twitchy), so an additional $12.50 a pay into this RRSP makes a total of almost $5700 a year in savings, or a net savings rate of 8%.
I'll have to update my spreadsheet when the plan is set up and see how this moves me to the point of having my retirement being fully funded. Not much but every little bit helps.
Also found an interesting article on retiring your debts before you retire
