The Canada Revenue Agency (CRA) annually revises the rates and maximums for the Canada Pension Plan. For business owners, it's important to keep an eye on your numbers.
Effective since Jan. 1, businesses are required to calculate second additional Canada Pension Plan contributions (CPP2) on earnings exceeding the annual maximum pensionable earnings.
The CRA has outlined the rates and maximums for these contributions in the year 2024 as the following:
- Additional maximum annual pensionable earnings: $73,200
- Employee and employer contribution rate: 4%
- Maximum annual employee and employer contribution: $188 and $376, respectively.
This means businesses will deduct $188 from employees and $376 from employers. In 2025, the limit increases to $79,400, which will result in $388 for employees and $776 for employers.
For information on how to calculate deductions and contributions, refer to the online calculators and formulas.
For more information on rates, refer to the CPP2 contribution rates and maximums.