CPP Changes

JUN 19, 2017


Since January 1, 2012, there are new rules for CPP. 

As an employer, you may have to deduct CPP contributions from the pensionable earnings you pay an employee who is 60 to 70 years of age, even if the employee is receiving a CPP or QPP retirement pension. 

As an employee, you must now elect to not contribute to the CPP.  If you do not make the election, you will have to contribute to the CPP even if you are receiving a CPP retirement pension while working.  You can elect to stop contributing to the CPP by completing a CPT30 form and sending the original to the Canada Revenue Agency.  This election takes effect on the 1st day of the month following the date you give a copy of the CPT30 form to your employer

Under the new rules, an employee who works and receives a CPP or QPP retirement pension has to contribute to the CPP if he or she is:

    60 to 65 years of age;

    65 to 70 years of age, unless the employee has filed an election with you or another employer to stop paying CPP contributions (the election will take effect on the first day of the month following the month the employee provides you with a completed and signed election form);

    65 to 70 years of age, if the employee revoked his or her election to stop paying CPP contributions.

For more information, go to:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/ddctns-eng.html#cmpltd_frm_cpt30

These changes do not affect the salary of an employee working in Quebec or an employee who is considered to be disabled under the CPP or QPP, nor do they affect the salary and wages of a person who has reached 70 years of age. Do not deduct CPP contributions from the salary and wages that you pay these employees.

Deduct CPP contributions for all employees who are 60 to 70 years of age unless your employee is 65 to 70 years of age and gives you a completed Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election.

The Canada Revenue Agency (CRA) can assess you if you do not deduct CPP contributions or do not remit the CPP contributions to the CRA as required. The assessment may also include penalty and interest charges.

For more information, go to Penalties, interest, and other consequences:

www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/pnlty/menu-eng.html