About the deduction of Canada Pension Plan (CPP) contributions

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What are CPP pensionable earnings

Pensionable earnings are the employee's remuneration from pensionable office or employment with certain exceptions.

Generally, you must deduct CPP contributions from:

  • Salary, wages or other remuneration
  • Commissions
  • Bonuses
  • Most taxable benefits
  • Honorariums
  • Certain tips and gratuities

To determine if you need to deduct CPP contributions, refer to:

When to deduct CPP contributions

You have to deduct CPP contributions from your employee's pensionable earnings if the employee meets all of the following conditions:

  • Employee is in pensionable employment during the year
  • Employee is not considered to be disabled under the CPP or the Quebec Pension Plan (QPP)
  • Employee is between 18 to 69 years old, even if the employee is receiving a CPP or QPP retirement pension

If the employee is between 65 to 69 years old and gives you a completed Form CPT30 during the year, you should stop deducting CPP contributions.

Learn more: Start, stop or restart CPP deductions.

Employer CPP contributions

You must also contribute an amount equal to the CPP contributions that you deduct from your employees' remuneration and remit the total of both amounts. Even if the required deductions were not made, you are deemed to have made them and the deductions not being made may result in a PIER.

Learn more: Pensionable and insurable earnings review (PIER).

When to stop deducting CPP contributions

For current employees, stop deducting CPP when the employee reaches the maximum contribution for the year in their employment with you.

Learn more: Start, stop or restart CPP deductions.

Situations where you need to prorate the maximum CPP contribution

You have to prorate the maximum CPP contribution in the following situations:

  • employee turns 18 in the year
  • employee turns 70 in the year
  • employee gives you a completed Form CPT30 during the year
  • employee is considered to be disabled under the CPP in the year
  • employee dies in the year

What if the employee has different jobs

The CPP annual maximum pensionable earnings apply to each job the employee holds with different employers (different business numbers).

What happens if your employee has multiple employers

If an employee leaves one employer during the year to start work with another employer, the new employer also has to deduct CPP contributions without taking into account what the previous employer paid. This is the case even if the employee has contributed the maximum amount during the previous employment.

Any overpayments will be refunded to employees when they file their income tax and benefit returns. As an employer, you are not entitled to a refund for the employer's share of the contributions.



  • Your employee notifies you that they have reached the maximum CPP contribution for the year. They tell you that they had $1,700 in CPP contributions deducted by a previous employer in the year and that when combined with the CPP you have deducted from their pay, they have reached the maximum.


  • Do not stop deducting CPP contributions from their pay. You are required to deduct CPP contributions from your employee's pay until they reach the maximum contribution for the year in their employment with you. Do not factor in CPP contributions made through other employers.
What happens when an employer is restructuring

Where there was an employer restructuring, the successor employer may, under certain situations, consider the amounts of CPP deducted, remitted or paid by the former employer for the employment of the employees for the year as if they had been deducted, remitted, or paid by the successor employer.

Learn more: Employer restructuring/Succession of employers – CPP/EI explained.

What to do if you have employees whose province of employment is Quebec

If you have employees whose province of employment is Quebec, regardless of your employee's province or territory of residence, you have to deduct Quebec Pension Plan (QPP) contributions instead of CPP contributions.

Learn more: Québec Pension Plan Contributions | Revenu Québec.

What to do if you transfer an employee between Quebec and another province or territory

You may have a place of business in Quebec and in another province or territory. If you transfer an employee from Quebec to another part of Canada before the end of the year, you must use a formula to reconcile the amounts contributed to the CPP and the QPP to make sure that enough contributions to the CPP are withheld and future benefits are not affected.

Learn more: Guide T4127, Payroll Deductions Formulas.

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, 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.

What to do if you have a business outside Canada

If you do not have a place of business in Canada, you have the option to file for CPP coverage for your employees in Canada (resident or non-resident) by filling out Form CPT13, Application for an Employer Resident Outside Canada to Cover Employment in Canada Under the Canada Pension Plan.

What to do if the employee may be subject to a foreign social security plan

Canada has reciprocal social security agreements with certain other countries to ensure that only one plan covers an employee, either the CPP or a foreign social security plan. To find out if a particular country has an agreement with Canada and which CPT application form to use, see What is the purpose of international social security agreements?

What to do if you are self-employed

If your net self-employment income and pensionable employment income is more than $3,500, you have to contribute to the CPP.

You need to calculate the amount of CPP you have to contribute when you complete your income tax and benefit return (line 22200, line 31000, line 42100, and Schedule 8).

Learn more: Canada Pension Plan (CPP) and Employment Insurance (EI) Rulings.

What is the CPP enhancement

Before January 1, 2019, employees were making a contribution of 4.95% on their pensionable earnings up to their annual maximum pensionable earnings (first ceiling), with employers making an equal contribution. These are the base contributions to the CPP.

From 2019 to 2023, the contribution rate for employees was increased gradually from 4.95% to 5.95%. These are the base contributions (4.95%) and the first additional contribution to the CPP (1%).

Beginning in 2024, a year's additional maximum pensionable earnings (second higher ceiling) is introduced. A second additional CPP contribution (CPP2) is made on these earnings, beginning at the first earnings ceiling and going up to the second earnings ceiling.


Related topics



CPP: 4(4)
Province in which person deemed employed
CPP: 6(1)
Pensionable employment
CPP: 6(2)
Excepted employment
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Regulations respecting employment to be included in pensionable employment
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Regulations respecting employment to be excepted from pensionable employment
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Contributions by employees in respect of pensionable employment
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Contributions by employers in respect of pensionable employment
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Succession of employers
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Contributions by persons in respect of self-employed earnings
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Salary and wages on which contribution made
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Year’s maximum pensionable earnings
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Amount of basic exemption
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Liability for failure to deduct and remit
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Requests for rulings
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Employment outside Canada
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Employment in Canada by an employer resident outside Canada
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Authority for certificates of coverage

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