CPP Going Up in 2021 -$536.90 for the Self Employed at the Maximum
The Canada Revenue Agency has announced the CPP rates for 2021.
The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2021 will be $61,600—up from $58,700 in 2020. The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.
Contributors who earn more than $61,600 in 2021 are not required or permitted to make additional contributions to the CPP.
The basic exemption amount for 2021 remains at $3,500.
The employee and employer contribution rates for 2021 will be 5.45%—up from 5.25% in 2020, and the self-employed contribution rate will be 10.9%—up from 10.5% in 2020. The increase in contribution rate is due to the continued implementation of the CPP enhancement.
The maximum employer and employee contribution to the plan for 2021 will be $3,166.45 each and the maximum self-employed contribution will be $6,332.90. The maximums in 2020 were $2,898.00 and $5,796.00.