Commissions paid at irregular intervals
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Commissions paid at irregular intervals
If an employee always gets paid on commission and is paid only after selling something (which does not occur regularly), you have to prorate the annual basic exemption amount for the number of days in the year between the commission payments to determine the maximum contribution amount.
Example
Sylvie, your employee, works on commission. You pay her only when she sells something. On June 1, 2016, you paid her a $1,800 commission. The last time you paid her a commission was March 16, 2016. There are 76 days between these two payments.
Calculate the required contribution for 2016 as follows:
- Prorate the basic yearly exemption: 76 ÷ 365 (days) × $3,500 = $728.77
- You have to deduct CPP contributions of: $1,800 − $728.77 = $1,071.23
- $1,071.23 × 4.95% = $53.03
- Date modified:
- 2017-01-05