how to calculate cpp deductions 2022. Determining Your CPP Payments
Generally, pensionable earnings are the ones from which CPP contributions are taken. If you deduct CPP payments from your employees’ pay, as an employer you must make a matching contribution. The CPP improvement ensures that this will continue.
The maximum pensionable earnings, basic exemption amount, and rate used to determine the amount of CPP contributions to deduct from employees’ compensation are all provided annually. See the CPP Contribution Rates, Maximums, and Exemptions Table for more details.
When an employee’s annual earnings reach the maximum pensionable earnings or the maximum employee contribution for the year ($3,499.80 in 2022) you no longer deduct CPP contributions from their paycheck.
Earnings from all of an employee’s jobs count toward the annual pensionable earnings maximum ($64,900 in 2022). (different business numbers). If an employee changes jobs during the year, both employers are responsible for withholding CPP contributions regardless of whether or not the former employer contributed. This is true even if the worker already paid in the maximum allowed during their previous job. Refer to the section entitled “Changes to your business and Canada Revenue Agency program accounts” if you have recently undergone a corporate restructuring or reorganization.
Jobs in Quebec
Instead of CPP contributions, employers in Quebec take QPP payments. Contribution rates for QPP are greater than those for CPP.
Refer to Guide TP-1015.G-V, Guide for Employers: Source Deductions and Contributions, for more information on making QPP deductions and payments.
It is possible that you operate out of both Quebec and another Canadian province or territory. When determining the maximum CPP contributions to deduct from an employee, you may take into account the QPP contributions you deducted from that employee throughout the year if you transfer them from Quebec to another province or territory. You’ll need to do more than just calculate and deduct EI and QPI premiums and QPP and CPP contributions to generate two T4s. Make sure you fill out both T4 slips accurately, including reporting insurable and pensionable earnings and appropriate deductions. Employers can find more details in Guide RC4120, Filing the T4 Slip and Summary.
