There are changes to the Canada Pension Plan (CPP) that will come into effect in 2024. The information below will help you understand the impact this will have on your net pay.

The 2024 yearly maximum pensionable earnings, exemption, contribution rate and maximum CPP contribution are summarized as follows: 

CPP Rates 
  2023 CPP  2024 CPP 
Maximum pensionable earnings   $66,600.00  $68,500.00 
Annual basic exemption  $3,500.00  $3,500.00 
Contributory earnings  $63,100.00  $65,000.00 
Contribution rate  5.95%  5.95% 
Employee-employer maximum contribution  $3,754.45  $3,867.50 

Effective January 1, 2024, an additional, higher earnings ceiling of $73,200, known as the Year’s Additional Maximum Pensionable Earnings (YAMPE), will be implemented, and used to determine second additional CPP contributions (CPP2). This CPP2 is part of the CPP enhancement. Pensionable earnings between $68,500 and $73,200 are subject to CPP2 contributions.   

The 2024 CPP2 maximums and rates are summarized as follows: 

Year’s Additional Maximum Pensionable Earnings  $73,200.00 
Year’s Maximum Pensionable Earnings  $68,500.00 
Basic Exemption  N/A 
Contributory Earnings  $4,700.00 
Contribution Rate  4.00% 
Maximum Contribution  $ 188.00 

As a result of the CPP enhancement, the CRA has created a new box on the T4 slip to report the second CPP contribution: Box 16A – Employee’s second CPP contributions. 

This box will be blank on the 2023 T4 you receive in February. 

More information on CPP enhancement can be found here.

From Employee Services