CPP/QPP Adjustment Options

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Canada & Quebec Pension Plan Rates

CPP Contribution Rate

CPP2 Contribution Rate

QPP Contribution Rate

CPP Maximum Employee Contribution

CPP2 Maximum Employee Contribution

QPP Maximum Employee Contribution

CPP/QPP Basic Exemption

CPP/QPP Maximum Pensionable Earnings

CPP2 Maximum Pensionable Earnings

5.95%

4%

6.4%

$3,867.50

$188.00

$4,160.00

$3,500.00

$68,500.00

$73,200.00

 

NOTE: CPP/QPP discrepancies are adjusted to and from tax deducted as necessary. Option A is the default CPP/QPP adjustment option.

 

NOTE: The CPP2 amount is calculated the same way regardless of which adjustment option is chosen:

       (The lesser of Pensionable Earnings and $73,200.00 – $68,500.00) x 4%

 

Option A - Adjust CPP/QPP if over maximum/under minimum (select only one of options A and B)

If this option is selected CPP/QPP adjustments will be made as shown below.

 

CPP will be calculated within the range where the maximum CPP is the lesser of:

 

(CPP Pensionable Earnings x 5.95%) OR the max.employee contribution of $3,867.50

 

and the minimum CPP is the lesser of:

 

((CPP Pensionable Earnings - $3,500.00) x 5.95%) OR the max.employee contribution of $3,867.50

 

QPP will be calculated within the range where the maximum QPP is the lesser of:

 

(QPP Pensionable Earnings x 6.4%) OR the max.employee contribution of $4,160.00

 

and the minimum QPP is the lesser of:

 

((QPP Pensionable Earnings - $3,500.00) x 6.4%) OR the max.employee contribution of $4,160.00

 

CPP/QPP deducted will not be adjusted if it falls between the upper and lower limits; otherwise CPP/QPP deducted will be reduced to the upper limit or increased to the lower limit as necessary. NOTE: This option ignores any potential reduction resulting from the annual CPP/QPP basic exemption of $3,500.00 and is used in situations where it is not desirable or possible to enter the number of pensionable weeks on each T4 slip. CPP/QPP can be prorated by using the pensionable weeks option as outlined in sections B and C below.

 

Option B - Adjust CPP/QPP based on number of pensionable weeks (select only one of options A and B)

If this option is selected CPP/QPP adjustments will be made as shown below.

 

CPP will be calculated as:

 

(CPP Pensionable Earnings - Prorated Deduction) x 5.95%

 

QPP will be calculated as:

 

(QPP Pensionable Earnings - Prorated Deduction) x 6.4%

 

The prorated deduction will be calculated as:

 

(number of pensionable weeks / maximum number of pensionable weeks) x $3,500.00

 

C - Maximum number of pensionable weeks

This number is the number of weeks in the employer's fiscal year and is used in the above calculation to prorate the CPP/QPP basic exemption. The default is 52 weeks.