Changes to CPP
Changes to the CPP Withholding Tax
Employers pay 4.95% of salaries into CPP, on a maximum of $54,900 of earnings per year, while the self-employed contribution rate is 9.9%. The government is implementing changes to the contribution rate and annual maximum. These changes will begin in 2019 and be fully implemented by 2025.
The maximum amount of income subject to CPP will be increasing from $54,900 to $82,700. In addition, the contribution rate will increase to 5.95%, while the self-employed rate will increase to 11.9%.
What does this mean in dollars? For 2016 the maximum employer and employee contribution is $2,544. By 2025 the maximum contribution will be $4,712.
If you have any questions or feel that this might impact you feel free to contact us.