CPP overpayment and recovering CPP contributions

CPP overpayment

Important notice

Changes to the rules for deducting Canada Pension Plan (CPP) contributions.

If, during a year, you have overdeducted CPP contributions from your employee’s remuneration (for example, the maximum amount of pensionable earnings was reached, or the employee was not employed in pensionable employment), you should reimburse the employee the amount deducted in error and adjust your payroll records to reflect the reduced deduction. This will result in a credit on your CRA payroll program account equal to the employee and employer part of the overdeduction. You may then reduce a future remittance in the same calendar year.

Do not include the reimbursed amount on the T4 slip. If you cannot reimburse the overpayment, show the total CPP contributions deducted and the correct pensionable earnings on the employee’s T4 slip. If you reported the employee’s overpayment on the T4 slip, you can ask for a refund by filling out Form PD24, Application for a Refund of Overdeducted CPP Contributions or EI Premiums. Make your request no later than four years from the end of the year in which the overpayment occurred.

Recovering CPP contributions

If you receive a notice of assessment or if you discover that you have underdeducted CPP contributions, you are responsible for remitting the balance due (both the employer’s and employee’s shares).

You can recover the employee’s contributions from later payments to the employee. The recovered contribution can be equal to, but not more than, the amount you should have deducted from each payment. However, you cannot recover a contribution amount that has been outstanding for more than 12 months. As well, you cannot adjust the employee’s income tax deduction to cover the CPP shortfall.

If you should have made a deduction in a previous year and you recover it through an additional deduction in the current year, do not report the recovered contributions on the current year’s T4 slip. You may have to amend your employee’s T4 slip. For more information on how to amend a T4 slip, see Guide RC4120, Employers’ Guide – Filing the T4 Slip and Summary.

The recovered amount does not affect the current year-to-date CPP contributions.


a) You did not deduct or remit CPP contributions that should have been deducted as follows:













b) After auditing the records, we send you a notice of assessment as follows:

Penalties and interest are added to the total.

c) The following year, you can recover the employee’s contribution of $95.60 as follows:


Each year, we check the calculations by matching the pensionable and insurable earnings you reported with the required CPP contributions or EI premiums indicated in the Payroll Deductions Tables.

 For more information, see Pensionable and Insurable Earnings Review (PIER).

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