Canada Revenue Agency announces maximum pensionable earnings for 2020
The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2020 will be $58,700—up from $57,400 in 2019. The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.
Contributors who earn more than $58,700 in 2020 are not required or permitted to make additional contributions to the CPP.
The basic exemption amount for 2020 remains at $3,500.
The employee and employer contribution rates for 2020 will be 5.25%—up from 5.1% in 2019, and the self-employed contribution rate will be 10.5%—up from 10.2% in 2019. The increase in contribution rate is due to the continued implementation of the CPP enhancement.
The maximum employer and employee contribution to the plan for 2020 will be $2,898.00 each and the maximum self-employed contribution will be $5,796.00. The maximums in 2019 were $2,748.90 and $5,497.80
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