The Canada Revenue Agency recently announced that the maximum pensionable earnings under the Canada Pension Plan for 2016 will be $54,900, up from $53,600 in 2015. As such, contributors who earn more than $54,900 in 2016 aren’t required or permitted to make additional contributions to the CPP.
This new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.
Meanwhile, the basic exemption amount for 2016 remains $3,500. As well, the employee and employer contribution rates for 2016 will remain unchanged at 4.95%. And, the self-employed contribution rate will remain unchanged at 9.9%.
The maximum employer and employee contribution to the plan for 2016 will be $2,544.30 each, while the maximum self-employed contribution will be $5,088.60. Comparatively, the maximums in 2015 were $2,479.95 and $4,959.90, respectively.
A version of this story originally appeared on the site of our sister publication Advisor.