Personal Finance By Administrator 836 Views

Getting down to business with the Canada Pension Plan enhancement

(NC) If you’re a business owner, you know how important it is to plan ahead. Your employees and your business operations depend on it. That’s why you need to know about the Canada Pension Plan (CPP) enhancement.

Starting January 1, 2019, you and your employees will begin making slightly higher contributions to the CPP through the enhancement.

The CPP enhancement is funded through a gradual contribution rate increase over 7 years. The increased contributions will be evenly split between you and your employees. Next year, your contribution rate will increase from 4.95% to 5.1%.

Some things will stay the same. You will continue to withhold, remit, and report contributions as you have in the past. As well, the T4 slip will remain the same. You will also continue to receive a tax deduction for any contributions you make as an employer.

Canada Revenue Agency payroll tables and formulas will be updated this fall to give you the required CPP enhancement calculations.