CRA finds that a payout of (non-excess) sick leave credits on termination was a retiring allowance

On termination of employment, the employee would be paid the value of his or her accumulated sick leave credits. CRA considered that this payment would be a retiring allowance (and thereby presumably excluded from CPP contribution requirements) except for the amount paid in excess of the equivalent of 20 days, which generally would be considered to be employment income given that this excess, in the absence of the termination, would have been paid out to the employee at the end of the year.

Neal Armstrong. Summaries of 21 July 2017 Internal T.I. 2017-0714931I7 F under s. 248(1) – retiring allowance and s. 248(1) – death benefit.