Checking the amount of CPP you deducted

Changes to the rules for deducting Canada Pension Plan (CPP) contributions.

Step 1 – Prorate the maximum CPP contribution for the year by following these steps:

Stage 1: Deduct the year's basic exemption ($3,500 for 2016) from the year's maximum pensionable earnings ($54,900 for 2016).

Stage 2: Multiply the result of Stage 1 by the number of pensionable months.

Stage 3: Divide the result of Stage 2 by 12 (months).

Stage 4: Multiply the result of Stage 3 by the CPP rate that applies for the year (4.95% for 2016).

To find out about the previous and current exemptions, maximums, and rates, see the CPP contribution rates, maximums and exemptions chart.

Step 2 – Calculate the CPP contribution per pay period using the Manual calculation for CPP, and withhold the amount calculated until one of the following happens:

• the maximum prorated contribution for the year is reached; or
• the last pay period for which deductions are required is completed.

Step 3 – The correct amount of CPP contributions will be the result of Step 1 or Step 2, whichever is the lowest.

Examples

To help you understand how to prorate, see examples.

Date modified:

2017-01-05