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Canada pension plan for 2017

Calculate the CPP contribution for Canada 2017

This calculator will help you calculate the contribution you need to make to the Canadian pension plan for 2017 earnings

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The CPP

The Canadian Pension Plan has been introduced in 1965 by Prime Minister Lester Bowles Pearson. This plan gives contributors regular pension payments. Every Canadian citizen who reaches a minimum of 3500$ in annual salary and are between 18 and 65 years old have to contribute.

Pension benefits can begin as early as age 60, but are paid 100% from 65 years old.

Rates and maximum for CPP in 2018

To determine the amount of CPP contribution, you must take into account these variables on the 2018 gross income:

  • Annual maximum allowable gross income to contribute (year's maximum pensionable earnings, YMPE): 55 300$
  • Basic exemption amount (unchanged since at least 1997): 3 500$
  • General contribution rate (employee and employer): 4.95%
  • Self-employed contribution rate: 9.9%

The general contribution rate as not changed since 2003.

The CPP should be calculated on gross income, not the after-tax income.

CPP calculation

For and employee or employer

CPP contribution = (The smallest number between: Gross revenue and: Year's maximum pensionable earnings YMPE in 2017 - Basic exemption) x (Employee or Employer rate / 100)

Exemple:

Gross earnings in 2017 = 15 000$

( 45 000$ - 3 500$ ) x ( 4.95 / 100) = Contribution
41 500$ x 0.0495 = 2 054.25$

For a self-employed

Canada pension plan contribution = Exactly the same calculation formula as mentioned previously except for the Self-employed rate.

CPP table of rates

Here are the different contribution tables to the CPP for the last two years

2017 contribution

Maximum annual earnings for CPP55 300$
CPP contribution rate of employee, employer4.95%
CPP contribution rate for self-employed9.9%
Basic exemption amount3 500$
Maximum contribution amount for employee, employer2 564.10$
Maximum contribution amount for self-employed5 128.20$

2016 contribution

Maximum annual earnings for CPP54 900$
CPP contribution rate of employee, employer4.95%
CPP contribution rate for self-employed9.9%
Basic exemption amount3 500$
Maximum contribution amount for employee, employer2 544.30$
Maximum contribution amount for self-employed5 088.60$

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