Yearly Maximum Pensionable Earnings Limits Increase in 2016

On November 2, 2015, Canada Revenue Agency (CRA) announced that the maximum pensionable earnings under the Canada Pension Plan (CPP) will increase on January 1, 2016 from $53,600 to $54,900.

What does that mean to you?

First, this means that if you are earning $54,900 or more in 2016, CPP contributions for employees and employers will increase to $2,544.30.  If you are self-employed – which means you’re paying both sides – this means that your annual CPP contribution will now be $5,088.60.

Second, if you are self-employed or a business owner, and plan your annual wages around the CPP, plan to increase your salary to $54,900 annually ($4,575 monthly) starting January 1st.

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