The maximum pensionable earnings under the Canada Pension Plan for 2022 is increasing to $64,900 from $61,600 in 2021.
The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada, according to a press release from the Canada Revenue Agency.
Contributors who earn more than $64,900 in 2022 won’t be required or permitted to make additional contributions to the CPP. The basic exemption amount for 2022 remains at $3,500.
Read: CPP maximum pensionable earnings to rise in 2021
The employee and employer contribution rates for 2022 will be 5.7 per cent, up from 5.45 per cent in 2021, while the self-employed contribution rate will be 11.4 per cent, up from 10.9 per cent in 2021. The increase in contribution rate is due to the continued implementation of the CPP enhancement, which was introduced in 2016.
For 2022, the maximum employer and employee contribution will be $3,499.80 each, while the maximum self-employed contribution will be $6,999.60. The maximums in 2021 were $3,166.45 and $6,332.90 respectively.
Read: ‘Exciting time for retirement’ as CPP deal signals premium boost to 5.95%