There are new rules as of January 1, 2012. Employers must deduct CPP contributions paid to employees between 60 to 70 years old even if they are receiving CPP or QPP pension benefits. Employers must also contribute a portion matching their employees’ deductions.
Currently, employees receiving CPP benefits do not have to contribute from their pay cheques, however starting in 2012 the following new rules apply:
• Working employees, between 60 and 65 years of age, must still contribute regardless of receiving CPP/QPP retirement pension benefits. This means employees between 60 and 65 currently exempted from CPP contributions will start being deducted January 1, 2012.
• Working employees between 65 and 70 years of age must also contribute unless the employee has filed an election with their employer to stop paying CPP contributions. An employer must receive a signed and completed election Form CPT30 from the eligible employee in order to stop CPP deductions from the employee’s pay cheque. It is anticipated that Form CPT30 will be available from the Canada Revenue Agency in late November 2011.
If this new rule applies to you and you would like more information on how to stop your contributions, please contact PEO Canada for guidance.
Additional information will also be provided later this year from PEO Canada to affected employees.
Written by Patricia Araujo and Bryan Jenner