Starting and stopping CPP deductions

There might be special situations where you may have to start or stop deducting CPP in the year for a particular employee. In these situations, you also have to prorate the maximum CPP contribution for the year to make sure you have deducted the correct amount.

Note

In some cases, the requirements are different for the Quebec Pension Plan. For information, see Guide TP-1015.G-V, Guide for Employers: Source Deductions and Contributions, which you can get from Revenu Québec.

Your employee turns 18 in the year

Start deducting CPP contributions in the first pay dated in the month after the employee turns 18. When you prorate, use the number of months after the month the employee turns 18 (see example 1).

Your employee turns 70 in the year

Deduct CPP contributions up to and including the last pay dated in the month in which the employee turns 70. When you prorate, use the number of months up to and including the month the employee turns 70 (see example 2).

Your employee gives you a completed Form CPT30

By filling out Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, and giving it to an employer, the employee can either stop or restart their CPP contributions. The employee is responsible for sending an original completed copy of Form CPT30 to the CRA. So an employer will only receive a copy. If an employee agrees to have an employer send the original to the CRA, the CRA will accept it.

Stopping CPP contributions

In certain situations, an employee can elect to stop contributing to the CPP. In order to be eligible for this election, the employee must meet all the following conditions:

  • the employee is at least 65 years of age, but under 70
  • the employee receives a CPP or QPP retirement pension
  • the employee is receiving, or will receive, pensionable employment earnings that require CPP contributions.

If the conditions are met, the employee can give you a copy of Form CPT30 with parts A, B and C completed. By filling out the form in this way, the employee is making an “election.”

This “election” is effective the first day of the month following when you receive the completed form. You will deduct CPP contributions, up to and including the last pay dated in the month the employee gives you the form. When you prorate, use the number of months up to and including the month before the election becomes effective (see example 3).

Note

The election to stop contributing to the CPP does not affect the salary or wages of an employee working in Quebec or an employee who is considered to be disabled under the CPP or QPP, nor do they affect the salary and wages of a person who has reached 70 years of age. Do not deduct CPP contributions from the salary and wages that you pay these employees.

Restarting CPP contributions

An employee can choose to restart contributing to CPP if all of the following conditions are met:

  • the employee filed a Form CPT30 “election” with an employer in a prior year
  • the employee is receiving, or will receive pensionable employment earnings that require CPP contributions

If the conditions are met, the employee can give you a copy of Form CPT30 with parts A, B and D completed. By filling out the form in this manner, the employee is “revoking their election.”

This “revocation” is effective the first day of the month following when you receive the completed form. You will restart CPP contributions in the first pay dated in the month after the employee gives you the form. When you prorate, use the number of months that includes the month the revocation becomes effective.

Go to Changes to the rules for deducting Canada Pension Plan (CPP) contributions to find detailed information such as:

  • what to do if you receive a form that is dated in the past or is post-dated
  • what to do if you have deducted CPP contributions after the “election” became effective
  • what to do when filling in boxes 16 and 26 of the employee’s T4 slip

Note
For more information on benefit entitlement, contact Service Canada or go to Canada Pension Plan: Overview

Your employee is considered to be disabled under the CPP

An employee who is considered to be disabled under the CPP does not have to contribute to the CPP. Deduct CPP contributions up to and including the last pay dated in the month in which the employee becomes or is considered to be disabled according to the letter that Service Canada sent to the employee. When prorating, use the number of months up to and including the month the employee was considered to be disabled.

Note

If the employee is no longer considered disabled under the CPP, start deducting CPP contributions on the first pay dated in the month after the employee is no longer considered disabled. When prorating, use the number of months after the month the employee ceased to be disabled.

Your employee dies in the year

Deduct CPP contributions up to and including the last pay dated in the month in which the employee dies. Also deduct CPP contributions from any amounts and benefits that are earned or owed to the employee on the date of death. When prorating, use the number of months up to and including the month of death.

Note

If any of these special situations apply to your employees, you may need to prorate their contributions for the year. For more information, see Checking the amount of CPP you deducted.

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