Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
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0-0309 |
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F. Francis |
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(613) 957-3496 |
| December 12, 1989 |
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Dear Sirs:
RE: Canada Pension Plan (CPP) and Unemployment Insurance (UI) Premiums Deferred Salary Leave Plans Section 6801 of the Income Tax Regulations
This is to advise you of our position concerning CPP and UI premiums in respect of contributions to, and payments out of, a deferred salary leave plan (DSLP).
The Department has determined that:
a) UI premiums are to be based on the employee's gross salary before deferrals during the period of deferral and no premiums are to be withheld from the deferred amounts when paid to the employee during the leave period.
b) CPP premiums are to be based on the employee's salary net of the deferred amounts during the period of deferral and on the deferred amounts when paid to the employee during the leave period. When the deferred amounts are paid to the employee by a trustee of the DSLP during the leave period, that trustee is deemed by the CPP Act to be an employer of that employee and is therefore required to pay the employer's CPP Contribution in respect, of that employee. Where the trustee/employee recovers the employer's CPP contribution from amounts otherwise payable to the employee, it is our view that this recovered amount will not be part of the employee's gross salary from that trustee/employer and therefore need not be included on the employee's T4 slip.
There are no provisions in the relevant legislations which would permit regular earnings to be combined with deferred compensation parents for the purpose of determining required CPP premiums where the trustee of a plan is deemed to be a separate employer under the CPP Act.
We trust that these comments will be of assistance to you.
Yours truly,
Wayne Douglasfor Director, Financial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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