Canadian payroll legislation: EI and CPP information

Resources
Payworks
Payworks

On your pay statement, if you have a look the 'Deductions' heading you will notice that every pay period there are deductions taken from your pay for both EI and CPP. 

EI, or Employment Insurance, is program in Canada that supplies temporary income to unemployed individuals while they look for a new career or to those who are taking time off from work due to a life event such as an illness, pregnancy, or taking care of a critically ill or injured person. Those who qualify for EI are able to receive this benefit because they've paid premiums over the past year - those amounts that are deducted from their pay as mentioned above - in addition to meeting the qualifying conditions. In Canada, the Canada Employment Insurance Commission (CEIC) is the entity responsible for overseeing EI including setting the annual EI premium rate - the rate at which the amount deducted off an employee's pay is determined. Quebec employees are subject to an additional deduction, QPIP or Quebec Parental Insurance Plan. QPIP replaced maternity, parental and adoption benefits that are provided by EI outside of the Province of Quebec.   

CPP, or Canadian Pension Plan, on the other hand provides remuneration to individuals who've paid into the program, or their families, in the event of the person's retirement, disability, or death. All Canadian workers outside of the Province of Quebec contribute to CPP while those working within the province contribute to the Quebec Pension Plan (QPP). Both CPP and QPP is a partial replacement of earnings provided to those who've contributed throughout their career. The amount of CPP an individual receives is based on how long they've been making contributions for as well as the overall amount they have contributed. 

EI versus CPP versus QPP versus QPIP, maximum earnings for it all as well as basic exemptions, contribution rates, and the list goes on. There's lots to know when it comes to EI and CPP. Luckily, Payworks has a chart with all of the information you might need to know for 2018 and 2019 below: 

  2018 2019
Canada/Quebec Pension
Annual Maximum Pensionable Earnings $55,900.00 $57,400.00
Annual Basic Exemption $3,500.00 $3,500.00
Annual Maximum Contributory Earnings $52,400.00 $53,900.00
CPP Contribution Rate 4.95% 5.10%
QPP Contribution Rate 5.40% 5.55%
Annual Maximum CPP Employee Contribution $2,593.80 $2,748.90
Annual Maximum CPP Employer Contribution $2,593.80 $2,748.90
Annual Maximum QPP Employee Contribution $2,829.60 $2,991.45
Annual Maximum QPP Employer Contribution $2,829.60 $2,991.45

 

Employment Insurance (EI) - Non-Quebec Employee
Annual Maximum Insurable Earnings $51,700.00 $53,100.00
Employee Contribution Rate 1.66% 1.62%
Employer Contribution Rate 2.324% 2.268%
Annual Maximum Employee Contribution $858.22 $860.22
Annual Maximum Employer Contribution $1,201.51 $1,204.31

 

Employment Insurance (EI) - Quebec Employee
Annual Maximum Insurable Earnings $51,700.00 $53,100.00
Employee Contribution Rate 1.30% 1.25%
Employer Contribution Rate 1.82% 1.75%
Annual Maximum Employee Contribution $672.10 $663.75
Annual Maximum Employer Contribution $940.94 $929.25

 

QPIP - Quebec Employee
Annual Maximum Insurable QPIP Earnings $74,000.00 $76,500.00
Employee Contribution Rate 0.548% 0.526%
Employer Contribution Rate 0.767% 0.736%
Annual Maximum Employee Contribution $405.52 $402.39
Annual Maximum Employer Contribution $567.58 $563.04

 

Other resources to consult regarding both EI and CPP includes the Government of Canada website. There, you can also find how to apply for CPP benefits through Canada.ca as well. For more information on QPP visit Retraite Quebec's website or, for more resources regarding QPIP, Quebec Parental Insurance Plan, visit the Province of Quebec's website. More information can also be found on Payworks' Resources page by visiting Payworks.ca.       

Interested in a Demo or more info?

We would be more than happy to show you how to get the most from our suite of workforce management solutions. Simply contact your sales representative at sales@payworks.ca  to start the conversation.