For the upcoming year (2021), Canada Revenue Agency has announced the changes related to Canada Pension Plan (CPP). On November 3, the Canada Revenue Agency (CRA) disclosed that the maximum pensionable earnings under the CPP will be $61,600 in 2021, an increase from $58,700 in 2020.
As a result of the increase, the CPP contribution rate will now increase to 5.45% starting January 2021.
The Canada Revenue Agency also confirmed the basic exemption amount for 2021 remains the same at $3,500. The maximum employer and employee contribution to CPP for 2021 will now be $3,166.45 and the maximum self-employed contribution will be $6,332.9 based on the rate announced.
Comparing to the year 2020, maximum contribution figures were $2,898 and $5,796 for employed and self-employed Canadians respectively.
For Canadians in the workforce with an income of 61,600 and above will end up paying an additional $268.45 in the upcoming year.
For more information on the tax updates for the new year, call us today at 1866-859-5299