Canada Pension Plan (CPP)
You have to deduct CPP contributions from an employee's pensionable earnings if that employee meets all of the following conditions:
- The employee is in pensionable employment during the year.
- The employee is not considered to be disabled under the CPP or the Quebec Pension Plan (QPP).
- The employee is 18 to 69 years old even if the employee is receiving a CPP or QPP retirement pension. Exception: do not deduct CPP if the employee is at least 65 years pf age, but under 70, 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 Canada Pension Plan and Employment Insurance Explained.
Employment in Quebec
Quebec employers deduct the Quebec Pension Plan (QPP) contributions instead of CPP contributions.
As a result of Quebec Pension Plan (QPP) enhancements the QPP contribution rates for employers and employees will be 5.55% starting on January 1, 2019. For information about QPP enhancement go to Changes to the Québec Pension Plan.
The contribution rates for QPP are higher than those for CPP. Although the year’s maximum pensionable earnings ($55,900 for 2018) 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 (5.4% for 2018) compared to the rate for an employee who pays into the CPP (4.95% for 2018).
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 or Guide RL 1.G-V, Guide to Filing the RL-1 Slip: Employment and Other Income.
Services and information
- What are the CPP contribution rates, maximums and exemptions?
- Calculating CPP contributions
- Checking the amount of CPP you deducted
- Changes to the rules for deducting Canada Pension Plan (CPP) contributions
- Canada Pension Plan (CPP) contributions for CPP working beneficiaries
- Starting and stopping CPP deductions
- CPP overpayment and recovering CPP contributions
- The Canada Pension Plan enhancement – Businesses, individuals and self-employed: what it means for you
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
- Other publications for Canada Pension Plan and employment insurance (CPP/EI)
- Video: Calculating CPP contributions, EI premiums, and income tax deductions | 5:54 min
- Video: A deeper look at the Canada Pension Plan and Employment Insurance | 42:42 min
- Webinar: Enhanced Canada Pension Plan for Business | 30 min
- Webinar: Enhanced CPP & You | 45 min
- Podcast: Canada Pension Plan Enhancement – Introduction | 9:23 min
- Podcast: Canada Pension Plan Enhancement – Planned Phases | 9:26 min
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