January 3, 2019

[HR] Changes to Statutory Payroll Deductions 2019

January 3, 2019

As 2019 rolls in, businesses should be aware of the following changes that come into effect this year, that may impact your payroll process and your employees pay-cheque statutory deductions. These changes are as follows:

  • Your Canada Pension Plan (CPP) contribution increases - Employees will see is an increase in Canada Pension Plan premiums beginning this year (2019). This is the first of five years of increases to pay for future enhancements to the Canada Pension Plan.
  • Prior to January 1st 2019, you contributed 4.95% on employment earnings between $3,500 and an annual earnings limit (adjusted each year based on changes in the average wage in Canada - In 2019 this limit is $ 57,400), and Employers make an equal contribution. From 2019 to 2023, the contribution rate for employees will gradually increase by one percentage point (from 4.95% to 5.95%) on earnings between $3,500 and the annual earnings limit. More details at - https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-enhancement.html
  • Step 1: 2019-2023
  • From 2019 to 2023, the contribution rate for employees will gradually increase by one percentage point (from 4.95% to 5.95%) on earnings between $3,500 and the original earnings limit.YearIncreaseIncreaseEmployer/Employee RateSelf-Employed Rate20190.15%0.3%5.10%10.2%20200.15%0.3%5.25%10.5%20210.2%0.4%5.45%10.9%20220.25%0.5%5.70%11.4%20230.25%0.5%5.95%11.9%
  • Step 2: 2024-2025
  • Starting in 2024, a second, higher limit will be introduced, allowing you to invest an additional portion of your earnings to the CPP. This new limit, known as the Year’s Additional Maximum Pensionable Earnings, will not replace the first earnings ceiling. Instead, it will subject your earnings to two earnings limits. This limit is referred to as the second earnings ceiling.This new range of earnings covered by the Plan will start at the firstearnings ceiling (estimated to be $69,700 in 2025) and go to the which will be 14% higher by 2025 (estimated to be $79,400). Like the first earnings ceiling, the second will increase each year to reflect wage growth.
  • Note: This additional range will only affect you in years when your annual earnings are above the first earnings ceiling.
  • Employment Insurance (EI) premiums, on the other hand, are expected to drop by four cents for every $100 of insurable earnings. More details at - https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/premium/rates2019.html

Please note that the actual amounts the each employee sees on their respective pay-cheques will vary based on individual earnings.

Subscribe

Get curated insights from the health benefits space every month.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Other Great Reads

Cultivating Operational Excellence with Business Intelligence

Jan 5, 2024

GreenShield Plan Member ID Cards Going Digital

Nov 28, 2023

Required 2023 T4 & T4A Reporting for National Dental Care Plan

Nov 24, 2023

8 Reasons Why You Should Upgrade Your Life Insurance Policy

Oct 17, 2023