01Jan 2019 by admin No Comments

How to manually calculate CPP contribution

Payroll
The basic exemption for CPP contribution is $3500.  In other words, the first $3500 income is exempt from CPP premiums. The question is, how do we prorate this $3500 exemption over the year.  Here is an excerpt from CRA website.  How to manually calculate the amount of CPP contributions you have to pay As an employer, you have to pay the same amount as your employee. Multiply the result of step 4 by 2. Example Joseph receives a weekly salary of $500 and $50 in taxable benefits. Calculate the amount of CPP contributions that you have to pay. Step 1: Calculate the basic pay-period exemption $3,500 ÷ 52 = $67.30 (do not round off) Step 2: Calculate the total pensionable income $500 + $50 = $550 Step 3: Deduct the basic pay-period exemption from the total pensionable income $550 – $67.30 = $482.70 Step 4: Calculate the amount of CPP contributions $482.70 × 4.95% = $23.89 Step 5: Calculate the…
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01Jan 2019 by admin No Comments

CPP EI rates for 2019

Payroll
Canada Revenue Agency has announced that employee and employer CPP contribution rates for 2019 will be 5.1 per cent, up from 4.95 per cent in 2018.  For self-employed individuals, this means a total of 10.2% for both employer and employee shares. Meanwhile, there is good news.   The EI contribution rate has decreased from 1.66% in 2018 to 1.62% in 2019.  For more information, click here. The maximum employer and employee contribution to the CPP for 2019 will be $2,748.90 each, and the maximum self-employed contribution will be $5,497.80. The maximums in 2018 were $2,593.80 and $5,187.60, respectively.  
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02May 2018 by admin No Comments

Are tips subject to CPP and EI

Payroll, Tax Returns
Are tips subject to CPP and EI.   Employees in the hospitality business, such as restaurants, hair salons, coffee shops, hotels... usually receive tips in one form or another.  Do they or their employers need to pay CPP and/or EI on the tips income.  This depends on the types of tips.    Tips can be controlled or direct. Controlled tips are gratuities that are controlled by the employer. Since they are controlled by the employer, the employer is considered to have paid these amounts to the employee. The employer adds a mandatory service charge to a client's bill to cover tips; The employer adds a percentage to a client's bill to cover tips; Tips allocated to employees using a tip sharing formula determined by the employer; Tips that an employer includes…
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