The Canada Revenue Agency announced Nov. 1 that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2022 will be $64,900. This is an increase from $61,600 in 2021.
The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.
Contributors who earn more than $64,900 in 2022 are not required or permitted to make additional contributions to the CPP.
The basic exemption amount for 2022 remains at $3,500.
The employee and employer contribution rates for 2022 will be 5.70%. This is an increase from 5.45% in 2021.
The self-employed contribution rate will be 11.40%, which is up from 10.90% in 2021. The increase in contribution rate is due to the continued implementation of the CPP enhancement, stated the CRA.
The maximum employer and employee contribution to the plan for 2022 will be $3,499.80 each and the maximum self-employed contribution will be $6,999.60. The maximums in 2021 were $3,166.45 and $6,332.90 respectively.