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Canada Pension Plan (R.S.C., 1985, c. C-8)

Full Document:  

Act current to 2022-08-08 and last amended on 2020-03-01. Previous Versions

PART IContributions (continued)

DIVISION AContributions Payable (continued)

Contributions by Employees and Employers in respect of Pensionable Employment (continued)

Marginal note:Employer’s base contribution

  •  (1) Every employer shall, in respect of each employee employed by the employer in pensionable employment, make an employer’s base contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the contribution rate for employers for the year is multiplied by the lesser of

    • (a) the contributory salary and wages of the employee for the year paid by the employer, minus such amount as or on account of the employee’s basic exemption for the year as is prescribed, and

    • (b) the maximum contributory earnings of the employee for the year, minus the amount, if any, that is determined in the prescribed manner to be the employee’s salary and wages on which a base contribution has been made for the year by the employer with respect to the employee under a provincial pension plan.

  • Marginal note:Employer’s first additional contribution

    (1.1) For 2019 and each subsequent year, an employer referred to in subsection (1) shall also, in respect of each employee employed by the employer in pensionable employment, make an employer’s first additional contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the first additional contribution rate for employers for the year is multiplied by the lesser of

    • (a) the employee’s contributory salary and wages for the year paid by the employer, minus the amount as or on account of the employee’s basic exemption for the year that is prescribed, and

    • (b) the employee’s maximum contributory earnings for the year, minus the amount, if any, that is determined in the prescribed manner to be the employee’s salary and wages on which a first additional contribution has been made for the year by the employer with respect to the employee under a provincial pension plan.

  • Marginal note:Employer’s second additional contribution

    (1.2) For 2024 and each subsequent year, an employer referred to in subsection (1) shall also, in respect of each employee employed by the employer in pensionable employment, make an employer’s second additional contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the second additional contribution rate for employers for the year is multiplied by the amount equal to

    • (a) the amount by which the employee’s contributory salary and wages for the year paid by the employer — not exceeding the employee’s additional maximum pensionable earnings for the year — exceeds the employee’s maximum pensionable earnings for the year,

    minus

    • (b) the amount, if any, that is determined in the prescribed manner to be the employee’s salary and wages on which a second additional contribution has been made for the year by the employer with respect to the employee under a provincial pension plan.

  • Marginal note:Succession of employers

    (2) If one employer immediately succeeds another as the employer of an employee as a result of the formation or dissolution of a corporation or the acquisition — with the agreement of the former employer or by operation of law — of all or part of a business of the former employer, the successor employer may, for the application of subsections (1), (1.1) and (1.2) and 8(1), (1.1) and (1.2) and section 21, take into account the amounts paid, deducted, remitted or contributed under this Act by the former employer in respect of the year in relation to the employment of the employee as if they had been paid, deducted, remitted or contributed by the successor employer. If the employer takes those amounts into account with respect to the employer’s contributions, the employer shall also take them into account with respect to the employee’s contributions.

  • Marginal note:Self-employment succeeded by employment

    (3) For the application of subsections (1), (1.1) and (1.2) and 8(1), (1.1) and (1.2) and section 21, if a person, in a year, is self-employed, ceases to be self-employed and becomes an employee of a corporation that is controlled by the person, the corporation may

    • (a) take into account the amount of contributory self-employed earnings of the person in the year as contributory salary and wages paid by the corporation to the employee in that year; and

    • (b) take into account one half of the contributions by the person in respect of self-employed earnings in the year as an amount deducted, remitted or contributed in relation to employee’s contributions for that year, and one half of that amount as an amount remitted or contributed in relation to employer’s contributions for that year.

  • R.S., 1985, c. C-8, s. 9
  • R.S., 1985, c. 30 (2nd Supp.), s. 3
  • 2004, c. 22, s. 15
  • 2011, c. 24, s. 174
  • 2016, c. 14, s. 4
  • 2018, c. 12, s. 363

Contributions by Persons in respect of Self-Employed Earnings

Marginal note:Base contribution in respect of self-employed earnings

  •  (1) Every individual who is resident in Canada for the purposes of the Income Tax Act during a year and who has contributory self-employed earnings for the year shall make a base contribution for the year of an amount equal to the product obtained when the contribution rate for self-employed persons for the year is multiplied by the lesser of

    • (a) the individual’s contributory self-employed earnings for the year, minus the amount by which the individual’s basic exemption for the year exceeds the aggregate of

      • (i) all amounts deducted as prescribed on account of the individual’s basic exemption for the year whether by one or more employers pursuant to section 8, and

      • (ii) all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year whether by one or more employers pursuant to that plan, and

    • (b) the individual’s maximum contributory earnings for the year, minus the individual’s salary and wages, if any, on which a base contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the individual’s salary and wages on which a base contribution has been made for the year by the individual under a provincial pension plan.

  • Marginal note:First additional contribution in respect of self-employed earnings

    (1.1) For 2019 and each subsequent year, an individual referred to in subsection (1) shall also make a first additional contribution for the year of an amount equal to the product obtained when the first additional contribution rate for self-employed persons for the year is multiplied by the lesser of

    • (a) the individual’s contributory self-employed earnings for the year, minus the amount by which the individual’s basic exemption for the year exceeds the aggregate of

      • (i) all amounts deducted as prescribed on account of the individual’s basic exemption for the year whether by one or more employers under section 8, and

      • (ii) all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year whether by one or more employers under that plan, and

    • (b) the individual’s maximum contributory earnings for the year, minus the individual’s salary and wages, if any, on which a first additional contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the individual’s salary and wages on which a first additional contribution has been made for the year by the individual under a provincial pension plan.

  • Marginal note:Second additional contribution in respect of self-employed earnings

    (1.2) For 2024 and each subsequent year, an individual referred to in subsection (1) shall also make a second additional contribution for the year of an amount equal to the product obtained when the second additional contribution rate for self-employed persons for the year is multiplied by

    • (a) the amount by which the individual’s contributory self-employed earnings for the year — not exceeding the individual’s additional maximum pensionable earnings for the year — exceeds the individual’s maximum pensionable earnings for the year,

    minus

    • (b) the individual’s salary and wages, if any, on which a second additional contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the individual’s salary and wages on which a second additional contribution has been made for the year by the individual under a provincial pension plan.

  • Marginal note:Employment succeeded by self-employment

    (2) For the application of subsections (1), (1.1) and (1.2), if a person, in a year, is an employee of a corporation that is controlled by the person, ceases to be employed by that corporation and becomes self-employed, the person may

    • (a) take into account the amount of contributory salary and wages paid by the corporation to the employee in the year as contributory self-employed earnings of the person in the year; and

    • (b) take into account the amounts deducted, remitted or contributed by the corporation in relation to the employee’s contributions and the employer’s contributions in respect of the person for the year as contributions by the person in respect of self-employment earnings in that year.

  • R.S., 1985, c. C-8, s. 10
  • R.S., 1985, c. 30 (2nd Supp.), s. 3
  • 2004, c. 22, s. 16
  • 2016, c. 14, s. 5
  • 2018, c. 12, s. 364

Marginal note:Election not to contribute in respect of self-employed earnings

  •  (1) Subject to subsections (2) and (5), section 10 does not apply with respect to any year in respect of any individual who, being a member of a religious sect or a division of a religious sect certified by the Minister pursuant to subsection (6), elects not to make a contribution with respect to that year.

  • Marginal note:Idem

    (2) An election referred to in subsection (1) shall

    • (a) be made in such manner and form as may be prescribed;

    • (b) commence to have effect, if approved by the Minister, on and from January 1 of the year in which the election is filed with the Minister; and

    • (c) cease to have effect on January 1 of the year next following the day on which a revocation of the election made in prescribed manner is received by the Minister.

  • Marginal note:Minister to be satisfied

    (3) The Minister shall approve an election referred to in subsection (1) where he is satisfied that

    • (a) the person making the election

      • (i) is a member of a religious sect or a division of a religious sect that has been certified pursuant to subsection (6), and

      • (ii) has been certified as such a member by a spokesman for that sect or division; and

    • (b) the spokesman

      • (i) has been authorized by the sect or division to certify persons as being members of the sect or division, and

      • (ii) has certified that the sect or division maintains tenets, teachings and practices of kinds referred to in subparagraphs (6)(a)(i) and (ii).

  • Marginal note:Return of contribution

    (4) Any contribution made by a contributor with respect to a year for which he elects under this section not to make a contribution shall, on application, be returned to him.

  • Marginal note:Only one election permitted

    (5) Where an individual who has elected not to make a contribution with respect to any year revokes the election, he may not make an election under this section with respect to any subsequent year.

  • Marginal note:Certification of religious sect or division

    (6) The Minister shall certify a religious sect or a division of a religious sect for the purposes of this section where

    • (a) he is satisfied that the religious sect

      • (i) is a religious organization that has established tenets and teachings that oppose the acceptance of benefits from any private or public insurance that provides for payments in the event of death, disability, old age or retirement,

      • (ii) does, as a practice, make provisions for the support of dependent members that are reasonable in view of their general level of living, and

      • (iii) was in existence in Canada on January 1, 1966 and has been maintaining the tenets, teachings and practices referred to in subparagraphs (i) and (ii) since that date; and

    • (b) the religious sect or division thereof has applied to him in prescribed form for certification.

  • 1974-75-76, c. 4, s. 7

DIVISION BCalculation of Contributions

Contribution Rate

Marginal note:Contribution rate — 1966 to 1986

  •  (1) The contribution rate for the years 1966 to 1986 is:

    • (a) for employees, 1.8% of contributory wages and salaries;

    • (b) for employers, 1.8% of contributory wages and salaries; and

    • (c) for self-employed persons, 3.6% of contributory self-employed earnings.

  • Marginal note:Contribution rates after 1986

    (2) The contribution rate for employees, employers and self-employed persons for 1987 and subsequent years is as set out in Schedule 1, as amended from time to time under section 113.1.

  • R.S., 1985, c. 30 (2nd Supp.), s. 4
  • 1997, c. 40, s. 59
  • 2016, c. 14, s. 6

First Additional Contribution Rate and Second Additional Contribution Rate

Marginal note:First and second additional contribution rates

 The first additional contribution rate and the second additional contribution rate for employees, employers and self-employed persons for 2019 and subsequent years is as set out in Schedule 2, as amended from time to time under section 113.1.

  • 2016, c. 14, s. 7

Contributory Salary and Wages

Marginal note:Amount of contributory salary and wages

  •  (1) The amount of the contributory salary and wages of a person for a year is the person’s income for the year from pensionable employment, computed in accordance with the Income Tax Act, plus any deductions for the year made in computing that income otherwise than under paragraph 8(1)(c) of that Act, but does not include any such income received by the person

    • (a) before he reaches eighteen years of age;

    • (b) during any month that is excluded from that person’s contributory period under this Act or under a provincial pension plan by reason of disability;

    • (c) after they reach sixty-five years of age if

      • (i) a retirement pension is payable to them under this Act or under a provincial pension plan, and

      • (ii) subject to subsection (1.1), they make an election to exclude the income; or

    • (d) after they reach seventy years of age.

  • Marginal note:Election

    (1.1) An election referred to in subparagraph (1)(c)(ii)

    • (a) shall be made or revoked in the prescribed form and manner;

    • (b) shall commence to have effect on the first day of the month following the month in which it is made;

    • (c) shall cease to have effect on the first day of the month following the month in which it is revoked;

    • (d) may be made only once in a year;

    • (e) may not be revoked in the year in which it is made;

    • (f) may not be made in a year in which an election is revoked; and

    • (g) is deemed to be an election in respect of the person’s income from all pensionable employment and in respect of their self-employed earnings.

  • Marginal note:Calculation of contributory salary and wages

    (1.2) If a person does not revoke — in respect of an employer — an election in the prescribed form and manner, the contributory salary and wages referred to in paragraphs 8(1)(a) and (1.1)(a), subsection 8(1.2), paragraphs 9(1)(a) and (1.1)(a) and subsection 9(1.2) do not, for the purposes of those provisions, include income from that employment. However, the person may — in respect of that income — make an election under subsection 13(3) and pay the contributions required under section 10 within one year after the person’s balance-due day.

  • Marginal note:Idem

    (2) In the case of a person who is a contributor under the Public Service Superannuation Act, there shall be included in computing the amount of that person’s contributory salary and wages for a year the amount of his salary, as defined in that Act, that is not otherwise included in computing income for the purposes of the Income Tax Act.

  • Marginal note:Idem

    (2.1) In the case of an Indian, as defined in the Indian Act, to the extent provided by regulations pursuant to subsection 7(1) and subject to any conditions prescribed by those regulations, there shall be included in computing the amount of that person’s contributory salary and wages for a year the amount of his income from employment that would otherwise be excepted pursuant to paragraph 6(2)(j.1).

  • Marginal note:Remuneration paid in respect of employment in province

    (3) A reference in this Act to the contributory salary and wages of a person for a year shall, in relation to any remuneration paid to him in respect of pensionable employment in a province providing a comprehensive pension plan, be construed as a reference to his income for the year from that employment as that income is required to be computed under the provincial pension plan of that province.

  • R.S., 1985, c. C-8, s. 12
  • R.S., 1985, c. 30 (2nd Supp.), s. 5
  • 2001, c. 17, s. 254
  • 2004, c. 22, s. 17(E)
  • 2009, c. 31, s. 26
  • 2016, c. 14, s. 8
  • 2018, c. 12, s. 365
 
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