Changes to the Canada Pension Plan (CPP)
- The maximum annual pensionable earnings under the Canada Pension Plan (CPP) is now referred to as the First Earnings Ceiling. In 2024, the first earning ceiling is $68,500. Employers and employees are required to contribute to the CPP on earnings that fall under this amount.
- The basic exemption amount for 2024 remains at $3,500. If an employee’s earnings fall below this amount during their annual employment, CPP contributions are not required.
- The employee and employer contribution rates for 2024 will be 5.95%. This is the percentage of the employee's pensionable earnings that both the employer and employee contribute to the CPP for earnings withing the first earnings ceiling.
- The self-employed contribution rate will be 11.9%.
- In 2024, the Second Earnings Ceiling, known as the additional maximum pensionable earnings or CPP2 comes into effect after the first earnings ceiling is reached. CPP2 contributions rates are 4% on earned wages between $68,000 and $73,000.
- CPP2 contributions are also matched by employers at a rate of 4%.
Changes to the Employment Insurance Rates (EI)
- The Canada Employment Insurance Commission has set the maximum insurable earnings for 2024 at $63,200. Maximum insurable earnings is the income level up to which EI premiums are paid.
- The 2024 Employment Insurance (EI) premium rate has been set at $1.66 per $100 of insurable earnings.
- The maximum weekly EI benefit rate increases from $650 to $668 per week.
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