Canada Pension Plan (CPP)

You have to deduct CPP contributions from an employee's pensionable earnings if that employee:

Notes

For more information, see Starting and stopping CPP deductions.

For more information about pensionable earnings, go to Pensionable and insurable earnings.

Employment in Quebec

Quebec employers deduct QPP contributions instead of CPP contributions.

The contribution rates for QPP are higher than those for CPP. Although the year's maximum pensionable earnings ($51,100 for 2013) and annual basic exemption ($3,500) for both plans are the same, an employee paying into the QPP will pay contributions at a higher rate (5.10% for 2013) compared to the rate for an employee who pays into the CPP (4.95% for 2013).

Note

The EI premium rates are lower for employee's working in Quebec than they are for employees working outside Quebec. For more information, see Employment insurance (EI).

For more information on deducting and remitting the QPP, see guide TP-1015.G-V, Guide for Employers: Source Deductions and Contributions, which you can get from Revenu Québec.

You may have a place of business in Quebec and in another province or territory. If you transfer an employee from Quebec to another province or territory, you can take into account the QPP contributions you deducted from that employee throughout the year when calculating the maximum CPP contributions to deduct. In addition to deducting CPP/QPP contributions and EI/QPIP premiums you will also have to prepare two T4 slips. It is important that you calculate and report the proper deductions and insurable/pensionable earnings on both T4 slips. For more information, see Guide RC4120, Employers’ Guide – Filing the T4 Slip and Summary.

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