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

Full Document:  

Act current to 2019-06-20 and last amended on 2018-12-15. Previous Versions

PART IContributions (continued)

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

Contributory Self-Employed Earnings

Marginal note:Amount of contributory self-employed earnings

  •  (1) The amount of the contributory self-employed earnings of a person for a year is the amount of the self-employed earnings except that,

    • (a) for a year in which the person reaches eighteen or seventy years of age, in which their contributory period ends under this Act or under a provincial pension plan by reason of disability or in which a disability pension ceases to be payable to them under this Act or under a provincial pension plan, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year

      • (i) after

        • (A) they reach eighteen years of age, or

        • (B) the disability pension ceases to be payable, or

      • (ii) before

        • (A) they reach seventy years of age, or

        • (B) the month following the month in which their contributory period ends under this Act or under a provincial pension plan by reason of disability,

      is of 12;

    • (b) despite paragraph (a), for a year in which a retirement pension is payable to them under this Act or under a provincial pension plan and for which they make an election to exclude self-employed earnings, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year before the election is deemed to be made — minus the number of months that are excluded from the contributory period under this Act or under a provincial pension plan by reason of disability — is of 12;

    • (c) despite paragraph (a), for a year in which a retirement pension is payable to them under this Act or under a provincial pension plan and for which they revoke an election to exclude self-employed earnings, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year after the election is deemed to be revoked — minus the number of months after they reach seventy years of age — is of 12;

    • (d) despite paragraph (a), for a year in which an election referred to in subparagraph 12(1)(c)(ii) is made, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year before the election is made — minus the number of months that are excluded from the contributory period under this Act or under a provincial pension plan by reason of disability — is of 12; and

    • (e) despite paragraph (a), for a year in which an election referred to in subparagraph 12(1)(c)(ii) is revoked, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year after the election is revoked — minus the number of months after they reach seventy years of age — is of 12.

  • Marginal note:Election

    (1.1) An election referred to in paragraph (1)(b) or (c)

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

    • (b) may be made only once for a year;

    • (c) may not be revoked for the year for which it is deemed to be made;

    • (d) may not be made for a year for which an election is revoked;

    • (e) is deemed to be made or revoked on the first day of the month referred to in the election or revocation, as the case may be; and

    • (f) may not be made for a year for which the person has income from pensionable employment.

  • Marginal note:Condition

    (1.2) For the purposes of paragraph (1.1)(e), the month may not be

    • (a) before the one in which the person reaches sixty-five years of age;

    • (b) before the one in which the retirement pension becomes payable; or

    • (c) after the one in which they reach seventy years of age.

  • Marginal note:Excluded earnings

    (2) Subject to subsection (1), the contributory self-employed earnings of a person do not include earnings for

    • (a) any period described in paragraph 12(1)(a), (b), (c) or (d); or

    • (b) any year that

      • (i) follows a year for which the person makes an election to exclude self-employed earnings, and

      • (ii) is not a year for which they revoke the election.

  • Marginal note:Election to include certain earnings — base contribution

    (3) Despite subsection (1), the amount of the contributory self-employed earnings of a person for a year for the purposes of subsection 10(1) shall, if the person or their representative makes an election in the prescribed form and manner within one year from June 15 in the following year — or, in the case of an employee to whom the Minister refunds an amount under section 38, from the day on which the Minister refunds the amount — include any amount by which

    • (a) the lesser of

      • (i) his contributory salary and wages for the year, and

      • (ii) his maximum pensionable earnings for the year,

    exceeds

    • (b) the aggregate of

      • (i) the person’s salary and wages 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 person’s salary and wages on which a base contribution has been made for the year by the person under a provincial pension plan, and

      • (ii) the lesser of

        • (A) the aggregate of all amounts deducted as prescribed on account of his basic exemption for the year by one or more employers pursuant to section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers pursuant to such a plan, and

        • (B) his basic exemption for the year.

  • Marginal note:Earnings — first additional contribution

    (3.1) For 2019 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.1) shall include any amount by which

    • (a) the lesser of

      • (i) the person’s contributory salary and wages for the year, and

      • (ii) the person’s maximum pensionable earnings for the year,

    exceeds

    • (b) the aggregate of

      • (i) the person’s salary and wages 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 person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan, and

      • (ii) the lesser of

        • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

        • (B) the person’s basic exemption for the year.

  • Marginal note:Earnings — second additional contribution

    (3.2) For 2024 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.2) shall include any amount by which

    • (a) the lesser of

      • (i) the person’s contributory salary and wages for the year, and

      • (ii) the person’s additional maximum pensionable earnings for the year,

    exceeds

    • (b) the aggregate of

      • (i) the person’s salary and wages on which a first additional contribution has been made for the year and the person’s salary and wages on which a second additional contribution has been made for the year,

      • (i.1) the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan and the person’s salary and wages on which a second additional contribution has been made for the year by the person under a provincial pension plan,

      • (ii) the lesser of

        • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

        • (B) the person’s basic exemption for the year, and

      • (iii) the amount calculated under subsection (3) or (3.1), if any.

  • Marginal note:Self-employed earnings where resident in province

    (4) A reference in this Act to the contributory self-employed earnings of a person for a year shall, in relation to any self-employed earnings of a person who was resident on the last day of the year in a province providing a comprehensive pension plan, be construed as a reference to his self-employed earnings for the year as such earnings are required to be computed under the provincial pension plan of that province.

  • R.S., 1985, c. C-8, s. 13
  • R.S., 1985, c. 30 (2nd Supp.), s. 6
  • 1997, c. 40, s. 60
  • 2009, c. 31, s. 27
  • 2016, c. 14, s. 9
  • 2018, c. 12, s. 366
 
Date modified: