The Canada Revenue Agency has announced that the Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan (CPP) for 2020 will be $61,600 – up 4.9% from $58,700 in 2020. 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.
The employee and employer contribution rates for 2021 will be 5.45%, up from 5.25% each in 2020. The increase is due to the CPP enhancement that started taking effect January 1, 2019.
The maximum employer and employee contribution to the CPP for 2021 will be $3,166.45 each, up from $2,898.00 in 2020. The basic exemption amount will remain at $3,500.00.