The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2023 will be $66,600—up from $64,900 in 2022, announced the Canada Revenue Agency (CRA) on Nov. 1.
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, explains the CRA.
Contributors who earn more than $66,600 in 2023 are not required or permitted to make additional contributions to the CPP. The basic exemption amount for 2023 remains at $3,500.
Contribution rates
The employee and employer contribution rates for 2023 will be 5.95 per cent – up from 5.70 per cent in 2022, and the self-employed contribution rate will be 11.90 per cent – a up from 11.40 per cent in 2022. “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 2023 will be $3,754.45 each and the maximum self-employed contribution will be $7,508.90. The maximums in 2022 were $3,499.80 and $6,999.60 respectively.
