By Yosie Saint-Cyr

The Canada and the Quebec Pension Plan rates for 2009 are available. The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.

The 2009 CPP/QPP contribution rates are as follows:

• Maximum pensionable earnings $46,300, up from $44,900 in 2008.  
• Basic exemption remains at $3,500  
• Contribution rate (employer and employee) remains at 4.95%  
• Self-employed contribution rate remains at 9.9%  
• Maximum employee contribution of $2,118.60, the maximums in 2008 were $2,049.30  
• Maximum employer contribution (per employee) of $2,118.60, the maximums in 2008 were $2,049.30  
• Maximum self employed contribution $4,237.20, the maximums in 2008 was $4,098.60.

Employers have to deduct CPP contributions from an employee’s remuneration if that employee:

• is 18 years or older, but younger than 70;
  
• is in pensionable employment during the year; and  
• does not receive a CPP retirement or disability pension.

All workers aged 18 or older must pay QPP contributions. This applies even to employees who receive a QPP or CPP retirement pension; or are aged 70 or older.

As an employer, you must also contribute the same amount of CPP that you deduct from your employees’ remuneration. Quebec employers deduct Quebec Pension Plan (QPP) contributions instead of CPP contributions. The QPP is the Québec equivalent of the Canada Pension Plan (CPP). Additional information can be found on the Government of Canada website.

About the Author:
Yosie Saint-Cyr, LL.B., is managing editor at HRinfodesk.com–Canadian Payroll and Employment Law News.

Originally published in HRinfodesk–Canadian Payroll and Employment Law News and Developments
November 2008.
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