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CHANGES TO CPP CONTRIBUTIONS 2024!

Have you heard the news? A second contribution and earnings ceiling for Canadian Pension Plan (CPP) enhancement  will go into effect for Canadian businesses and their employees as of January 1, 2024 (that’s not very far away!)

Blurred Business People

How much is this CPP going to cost me as an employee or as an employer..or BOTH?

How much is deducted and remitted for employee (and subsequently employer) CPP contributions are based on an employee’s annual earnings. In the past, the government has set a single maximum CPP contribution (or earnings ceiling) for the year ahead.

However, in 2024 there will be two earnings ceilings as opposed to just one.

CPP details

 

Contribution rate for first earnings ceiling 5.95%

1st Earnings Ceiling $68,500

Maximum yearly CPP contribution  $3,867.50

Contribution rate for second earnings ceiling 4.00%

2nd Earnings Ceiling $73,200

2024 Maximum yearly Second CPP contribution $188.00

 

Earnings above the second earnings ceiling are NOT subject to CPP.

Self-employed persons should note that they pay both the employee and employer CPP contributions.

Your 2024 T4 / T4A will look a bit different.  There will be 2 boxes for CPP contributions – one showing the contributions made to the first ceiling, and another box showing the contributions up to the second ceiling.

This means some extra reporting requirements for employers. Contact us if you have any questions.

LRH Larry R Hemeryck
CPA Professional Corporation

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