Canada Entered Last Phase Of CPP Enhancements On January 1, 2024

All Canadian employers other than those in Quebec¹ are required to:

• Deduct Canada Pension Plan (CPP) contributions from their employees' pensionable earnings if the employee meets certain conditions;
• Contribute an amount equal to the CPP contributions that were deducted; and
• Remit both amounts.

These obligations end when the employee reaches the maximum contribution for the year.

On January 1, 2024, Canada entered the last phase of CPP enhancements introduced in 2016 through Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act.

Prior to January 1, 2019, employees and employers made base contributions. Employees contributed 4.95% on their pensionable earnings up to a year's maximum pensionable earnings (YMPE) (first ceiling) and employers made an equal contribution.