6 February 1990 Ruling 59501 F - CPP and UI Premiums for Contributions To, and Payments Out of, Deferred Salary Leave Plan

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.

February 6, 1990

Dear Sirs:

Re:  Canada pension plan (CPP) and unemployment insurance (UI) Premiums Deferred salary Leave Plans Section 6801 of the Income Tax Regulations

Further to the telephone conversation on February 2, 1990 between 19(1) and our Mr. Adler this is to advise you of our position concerning CPP and UI premiums in respect of contributions to, and payments our 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 ad no premiums are to be withheld from the deferred amounts when paid t 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 contributions in respect of that employee.  Where the trustee/employer recovers the employer's CPP contributions from amounts  otherwise payable tot eh 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.

We trust that out comments will be sufficient for your purposes.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate