CPP Flashcards
when do you deduct CPP?
employee is 18 - 70 years old
and has pensionable income
when do you not deduct CPP?
when you receive a CPT30 Election to stop
do you deduct CPP from pension payments?
no
see page 14
what is the current rate for CPP?
4.95%
What is the employer portion
same as employees
what is the maximum pensionable earnings for 2014
$52,500
What is the maximum contribution for 2014
$2,425.5
(52,500 - 3,500) 4.95%
what happens if you have a new employee
you do not take into consideration what they already paid in CPP / Income was
What happens if there is an overpayment of CPP - Employee
employee will be refunded when they file their income tax return
What happens if there is an overpayment of CPP - employer
no provision CPP that allows them to refund or credit the employer in these circumstances
when an employee turns 18 what do you do?
Prorate the CPP
Ex. Brent turns 18 on June 15, 2013. he receives $1000 every 2 weeks (26,000 / year). this amount is less than the max pensionable earnings subject to CPP.
calculate Brent’s maximum CPP contribution for 2013
(51,100 - 3500) x 6/12 x 4.95%
= 1178.10
how do you calculate the basic exemption to determine amount to deduct for each pay period for a proration?
use Appendix 2
how do you determine the basic exemtion amount for CPP for commissions paid at irregular intervals
you have to prorate the basic exmption amount for the number days in the year b/w the commission payments to determine the max contribution amount
CPP & commissions paid at irregular intervals example:
Sylvie, your employee works on commission. YOu pay her only when she sells something. on june 1, 2013, you paid her a $1,800 commission. the alst time you paid her a commission was march16, 2013. there are 76 days b/w the two commissions
Step1: prorate the basic year exemption
(76 / 365 (days) x 3,500 =728.76
Step 2: you have to deduct CPP of
1,800 -728.76 = 1071.24
step 3: 1071.24 x 4.95% =$53.03
