The Canada Pension Plan (CPP)

It is an insurance program designed to help Canadians provide income for their retirement and it can also provide them with income if they become disabled.

CPP contributions are deducted from an employee's remuneration if that employee:

Canada Pension Plan contributions are directly related to annual earnings. Each year, the basic exemption, maximum contribution limit, and benefits are adjusted according to the cost of living.

Year Max. Annual Pensionable Earnings Basic Exemption Maximum Contributory Earnings Employee Contribution Rate (%) Max. Annual Employee Contribution Max. Annual Self - Employed Contribution
2010 $47,200 $3,500 $43,700 4.95 $2,163.15 $4,326.30

If you make less than the maximum annual pensionable earnings you can use the CPP contributions rates, maximums and exemptions chart, to determine how much CPP contributions to deduct.

If you're an employer:

Employment Insurance (EI)

This insurance provides:

Types of Employment Insurance benefits

Manual calculation for EI

Year Max. Annual Insurable Earnings Rate Max.Annual Employee Premium Max.Annual Employer Premium
    Federal Quebec Federal Quebec Federal Quebec
2010 $43,200 1.73 1.36 $747.36 $587.52 $1,046.30 $822.53
2009 $42,300 1.73 1.38 $731.79 $583.74 $1,024.51 $817.24
2008 $41,100 1.73 1.39 $711.03 $571.29 $995.44 $799.81
2007 $40,000 1.80 1.46 $720.00 $584.00 $1,008.00 $817.60
2006 $39,000 1.87 1.53 $729.30 $596.70 $1,021.02 $835.38

For the Employer:

a) To calculate the employee's EI premiums using the manual calculation method, follow these steps:

Step 1: Enter the employee's insurable earnings $_____
Step 2: Enter EI premium rate for the year (Go to EI Contribution rates and maximums chart for current and prior year rates)
Step 3: Multiply Step 1 by Step 2 = $_____

The result is the EI premium to be deducted for your employee.

b) The employer stops deducting EI premiums when the employee reaches the maximum insurable earnings ($42,300 for 2009) or the maximum employee premium for the year ($731.79 for 2009).

c) As an employer you must pay an EI premium payable that is 1.4 times the EI premium payable by each employee.

EI premiums you deducted from your employees in the month $195.50
Your share of EI premiums (× 1.4) $273.70
Total amount you remit for EI premiums = $469.20