CRA announces 2020 maximum pensionable earnings for CPP

By November 5, 2019 No Comments

The Canada Revenue Agency announced on Friday that the maximum pensionable earnings under the Canada Pension Plan for 2020 will be $58,700, up from $57,400 in 2019.

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 CRA said in a release.

Contributors who earn more than $58,700 in 2020 aren’t required or permitted to make additional contributions to the CPP. The basic exemption amount for 2019 remains at $3,500.

Employee and employer CPP contribution rates for 2020 will be 5.25%, up from 5.1% in 2019.

The self-employed contribution rate will be 10.5%, up from 10.2% in 2019. This increase is due to the CPP enhancement that was implemented on Jan. 1, 2019.

The maximum employer and employee contribution to the CPP for next year will be $2,898 each, and the maximum self-employed contribution will be $5,796. The maximums in 2019 were $2,748.90 and $5,497.80, respectively.

Article Courtesy of Investment Executive