The maximum pensionable earnings under the Canada Pension Plan for 2023 is increasing to $66,600 from $64,900 in 2022.

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 $66,600 in 2023 won’t be required or permitted to make additional contributions to the CPP. The basic exemption amount for 2023 remains at $3,500.

Read: CPP maximum pensionable earnings rising to $64,900 in 2022

The employee and employer contribution rates for 2023 will be 5.95 per cent, up from 5.7 per cent in 2022, while the self-employed contribution rate will be 11.9 per cent, up from 11.4 per cent. The increase in the contribution rates is due to the continued implementation of the CPP enhancement, which was introduced in 2016.

For 2023, the maximum employer and employee contribution will be $3,754.45 each, while the maximum self-employed contribution will be $7,508.90. The maximums in 2022 were $3,499.80 and $6,999.60, respectively.

Read: ‘Exciting time for retirement’ as CPP deal signals premium boost to 5.95%