Deductions from your pay

Your employer has to calculate Canada Pension Plan contributions, employment insurance premiums, and income tax deductions based on your earnings. They must deduct these amounts directly from your earnings and send them to the Canada Revenue Agency.

Canada Pension Plan and Quebec Pension Plan

The Canada Pension Plan provides pensions and benefits when contributors retire, become disabled or die. Almost all individuals who are 18 years of age or older and work in Canada must contribute to the Canada Pension Plan. If you work in the province of Quebec, you contribute to the Quebec Pension Plan instead.

Paul's employer did not deduct Canada Pension Plan contributions from his pay because he was under the age of 18. When he turns 18, his employer will start deducting contributions.

Employment insurance

Employment insurance provides temporary financial assistance to unemployed Canadians who lose their job through no fault of their own, while they look for work or upgrade their skills. It will also help if you are sick, pregnant, or caring for a newborn or adopted child, or caring for a family member who is seriously ill.

Paul's employer deducted employment insurance premiums from his pay. If he becomes unemployed, he may be entitled to benefits.

Income tax

Income tax is collected on behalf of the federal, provincial and territorial governments. The amount of income tax you pay is based on the amount of your income.

Paul's employer deducted income tax from his pay. If too little tax was deducted, Paul will owe additional tax when he completes his return. If too much tax was deducted, he will get a refund.

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