Canada Pension Plan

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

• 10 (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 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 contribution has been made for the year and such amount, if any, as is determined in prescribed manner to be the individual’s salary and wages on which a 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 purpose of subsection (1), if a person, in a year after 2003, is an employee of a corporation 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.