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Who has to pay CPP contributions?in Small Business Information and Statistics
Starting 2012, CPP contributions will still be paid on employment and self-employment income even if the employee or employer is already receiving CPP retirement pension. Once the individual turns 65 years old, he or she can elect to stop contributing to CPP by completing the form CPT30 from the CRA. The completed form must be sent to the CRA and a copy must be submitted to the employer. Please note that if the individual decides to revoke the election, he or she can do so by completing form CPT30 but not until the following year.
Before 2012, CPP contributions in all provinces except Quebec are made by employees who are 18 to 69 years old unless they are already collecting CPP retirement and disability pension. CPP contributions are deducted starting in the month following the employee’s 18th birthday. Contributions will no longer be deducted in the month following the employee’s 70th birthday, or the month in which the employee starts receiving CPP retirement pension (until the end of 2011).
Employers are responsible for these CPP deductions. In addition to this, employers pay the same premium as the employee. Self-employed people must pay both the employer and employee portions of the CPP premiums which are calculated on the personal income tax return.
Please note that the employer will report the amount of pensionable earnings of the employee on his or her T4 if only a part of the employee’s earnings during the year are subject to CPP contributions. Otherwise, the employer can leave box 26 of the T4 which is for CPP pensionable earnings blank.
Reference: TaxTips.ca, “Who has to pay CPP or QPP contributions?” http://www.taxtips.ca/cppandei/whopayscppcontributions.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A++TaxtipscaWhatsNewTaxTips.ca+What%27s+New