Contributions to your Canada Pension Plan and Employment Insurance are deducted from every paycheque. However did you know that there are deductible maximums for both of these plans. This means if you earn more than the maximum insurable amounts you will not have to make further contributions to these plans.
The CPP maximum insurable amount for 2008 is $44,900. The EI maximum insurable amount for 2008 is $41,100.
When your 2008 earnings reach $41,100 you will stop paying EI premiums. You will stop paying Canada Pension Plan premiums at $44,900. This is implemented automatically by your payrole department. However it is always good to double check.
So assuming that you earn more than $41,100 a year, at some time during the year your paycheque will be bigger. On January 1 of the following year the deductions reset and you will once again have to make CPP and EI payments.
CPP & EI Contribution Limits
|Maximum Pensionable Earnings||$44,900||$43,700||$42,100|
|EI Rate||1.73% or 1.39% (for Quebec)||1.80% or 1.46% (for Quebec)||1.87%|
|Maximum Employee Contribution||$711.03 or $571.29 (for Quebec)||$720.00 or $584.00 (for Quebec)||$729.30 or $596.70 (for Quebec)|
|Maximum Employer Contribution*||$995.44 or $799.81 (for Quebec)||$1008.00 or $817.60 (for Quebec)||$1,021.02|
* Assuming the employer contribution rate is 1.4