Employment outside Canada
Generally, employment has to take place in Canada to be pensionable or insurable under the Canada Pension Plan or the Employment Insurance Act. However, in certain situations, employment outside Canada may be pensionable or insurable. This is the case if a person is working outside Canada for a Canadian company or the Canadian government.
If a worker or payer is not sure of the worker’s employment status, either party can request a ruling from Canada Revenue Agency (CRA)to have the status determined for purposes of the Canada Pension Plan and the Employment Insurance Act. For more information on how to get a CPP/EI ruling, go to How to get a CPP/EI ruling.
CPP contributions
If you are a Canadian employer and you hire someone to work for you outside Canada, you should deduct CPP contributions if one of the following applies to you:
- the employee usually reports for work at your place of business in Canada
- the employee is a Canadian resident and is paid from your place of business in Canada
If the employment does not meet either of these conditions, the employment outside Canada is not pensionable. Do not deduct CPP from the employee’s remuneration.
You have the option of extending CPP coverage for your employees and deducting contributions from employment outside Canada that is not usually pensionable employment if the conditions on Form CPT8, Application and Undertaking to Cover Employment Outside Canada Under the Canada Pension Plan, are met. To extend coverage, fill out Form CPT8, and send two copies to your tax services office.
Note
Do not use Form CPT8 if Canada has a reciprocal social security agreement with the country of employment. For a list of countries with which Canada has an agreement, see Employment in a country where a social security agreement has been signed with Canada.
For more information on when employment outside Canada is pensionable or insurable, go to Employment outside Canada.
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