As it is the beginning of the year, employers may be paying year-end bonuses or commission payments. Should you choose to contribute to your RRSP (Registered Retirement Savings Plan) on these amounts, here is what you need to consider.
The RRSP contributions deadline is, February 29, 2016.
Your RRSP contribution limit will be referenced on your previous years Notice of Assessment (NOA) or 18% of your last years earned income up to a maximum contribution of $25, 370.00 (for 2016 tax year).
If you do not have your NOA, contact the Canada Revenue Agency (CRA) and they will determine your limit after asking the required security questions. The CRA also provides a free online service that enables you to access your RRSP contribution limit information online. Remember that unused contribution room from 2015 can be carried forward.
Although tax sheltered, the bonus and commissions payments when contributed to your RRSPs are subject to other applicable source deductions such as CPP/QPP (Canada/Québec Pension Plan), EI (Employment Insurance) and QPIP (Québec Parental Insurance Plan).
Reach out to your PEO Canada Payroll Administrator to help facilitate your contributions.
Genevieve Bessette / Payroll Administrator / PEO Canada