In 2022, the maximum CPP contribution an employer or an employee can make is $3,499.80 each. The maximum CPP contribution a self-employed can make is $6,999.60.
CPP Contributions
The Canadian Pension Plan (CPP) is a social security program offered by the federal government of Canada. Based on the time of contribution, amount of contribution, age when CPP benefit is applied for and average earnings, the contributors receive the CPP benefit.
However, there is a limit for maximum CPP benefit one gets, similarly there is a cap on the amount of contribution that can be made.
Let’s find out what the maximum cap is.
What is the maximum CPP contribution?
In 2022, employees and employers must make 5.70% per annum of the employee’s salary. In addition, the employee must be above 18 years of age and below 70 years of age. The self-employed must contribute 11.40% per annum of their business’ net income.
Regardless of the earnings, in 2022, the maximum an employer and employee can contribute is $3,499.80 each per year and the maximum a self-employed can contribute is $6,999.60 per annum, Of the $6,999.60 the self employed can get a tax deduction of $3,499.8. in this year.
It is notable that the contribution rate and the maximum contribution dollar value keeps changing year after year. Historically, it has been increasing.
We have illustrated the previous five years rates in the table below:
Maximum CPP contribution
The Canadian Pension plan is basically a government sponsored scheme, hence, it is logical of the government to cap the contribution at a maximum.