Canada Pension Plan (CPP)
You have to deduct CPP contributions from an employee's pensionable earnings if that employee:
- is in pensionable employment during the year; and
- is not considered to be disabled under the CPP or the Quebec Pension Plan (QPP); and
- is 18 to 70 years old even if the employee is receiving a CPP or QPP retirement pension. Exception: do not deduct CPP if the employee is 65 to 70 years old, and gives you Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election with parts A, B and C completed.
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).
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.
- CPP contribution rates and maximums
- Checking the amount of CPP you deducted
- Starting and stopping CPP deductions
- CPP overpayment and recovering CPP contributions
- Pensionable and insurable earnings review (PIER)
- Methods of calculating deductions - CPP, EI and income tax
Benefits and allowances
Determine whether benefits and allowances such as gifts, meals and housing are taxable or not.
- Special payments chart
Forms and publications
- Guide T4001, Employers' Guide - Payroll Deductions and Remittances
- Guide T4130, Employers' Guide - Taxable Benefits and Allowances
- Guide T4032, Payroll Deductions Tables
- Guide T4008, Payroll Deductions Supplementary Tables
- Guide T4127, Payroll Deductions Formulas for Computer Programs
- Other publications for Canada Pension Plan and Employment Insurance (CPP/EI)
- Canada's social security agreements with other countries
- CRA's and ESDC's responsibilities for the administration of the CPP and the EI Act
- Employment and Social Development Canada - Retirement Pensions and Benefits
- Video: Changes to the Canada Pension Plan effective January 1, 2012 (63:36 min.) (high-speed version)
- Video series: Payroll Information for a New Small Business
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