The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2012 will be $50,100 — up from $48,300 in 2011, according to the Canada Revenue Agency (CRA).
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, according to the CRA.
Contributors who earn more than $50,100 in 2012 are not required or permitted to make additional contributions to the CPP.
The basic exemption amount for 2012 remains $3,500. Individuals who earn less than that amount do not need to contribute to the CPP.
The employee and employer contribution rates for 2012 will remain unchanged at 4.95 per cent, and the self-employed contribution rate will remain unchanged at 9.9 per cent.
The maximum employer and employee contribution to the plan for 2012 will be $2,306.70, and the maximum self-employed contribution will be $4,613.40. The maximums in 2011 were $2,217.60 and $4,435.20.
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