Statutory Deductions

All payments made to employees for salary and wages are subject to the following statutory deductions.

Income Tax

• In accordance with Canada Revenue Agency (CRA) regulations, Income Tax is deducted from salary and wages based on the information provided on the TD1 and TD1ON forms.
• If there is a change in your entitlement to personal tax credits, you should complete new TD1 and TD1ON forms and return them to Human Resources (forms available online and in Human Resources)
• Having trouble filling out your Tax Credit Forms?  Use the following worksheets: TD1 – Worksheet, TD1ON – Worksheet

Canada Pension Plan (CPP)

• All employees between the ages of 18 and 70 are subject to CPP deductions
• The deduction rate and the annual maximum contributions are established by CRA and vary yearly
• If an employee is in receipt of a Canada Pension Benefit, and are over the age of 65, and wishes to be CPP exempt (i.e. CPT30 form), proof must be presented in Payroll Services before this change can be made.

Canada/Quebec Pension Plan (CPP) Enhancement Contribution

As a part of the CPP enhancement, additional CPP contributions will be phased in between 2024 and 2025.

In 2024, all employees pay CPP contributions (at 5.95%) on earnings up to the Year’s Maximum Pensionable Earnings (YMPE $68,500). In addition, employees who earn more than $68,500 per annum will continue to make CPP contributions at a rate of 4% until they reach the YAMPE of $73,200. The pay bracket between $68,500 and $73,200 is known as the Year’s Additional Maximum Pensionable Earnings (YAMPE $73,200).  

Example; an employee who earns $78,000 annually will contribute to CPP at a rate of 5.95% on the first $68,500 of their earnings. They will continue to contribute to CPP at 4% up to the $73,200 (YAMPE). There are no CPP contributions payable on earnings over $73,200. The additional CPP contribution (in this example) is $188 ($73,200 – $68,500 = $4,700 x 4% = $188).

The Canada Revenue Agency has created two new additional boxes on the current T4 as follows:

• Box 16A – for reporting of employees’ second CPP contribution
• Box 17A – for reporting of employee’s second QPP contribution

Note:  Although you will see the above boxes on your T4, no amounts will be reported on your 2023 T4 slips because the new CPP contribution requirements will only begin in 2024.

For further information on CPP enhancements please visit CRA’s website at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/cpp-enhancement.html

Employment Insurance (EI)

There are no age exemptions on payment of EI.

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