Subject: CRA Electronic mailing list service
The following is now available on the CRA Web site:
CPP pensionable earnings ceiling for 2006 up to $42,100
News release
CPP pensionable earnings ceiling for 2006 up to $42,100
Ottawa, November 2, 2005… The Canada Revenue Agency announced today that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2006 will be $42,100-up from $41,100 in 2005. The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.
Contributors who earn more than $42,100 in 2006 are not required or permitted to make additional contributions to the CPP.
The basic exemption amount for 2006 remains $3,500. Individuals who earn less than that amount do not need to contribute to the CPP.
The employee and employer contribution rates for 2006 will remain unchanged at 4.95%, and the self-employed contribution rate will remain unchanged at 9.9%.
The maximum employer and employee contribution to the plan for 2006 will be $1,910.70, and the maximum self-employed contribution will be $3,821.40. The maximums in 2005 were $1,861.20 and $3,722.40.
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Just in case you were interested … the CPP Ceiling rates in previous years were…
2003 – $39,900
2004 – $40,500 (increased 1.50% over 2003)
2005 – $41,100 (increased 1.48% over 2004)
now..
2006 – $42,100 (increases 2.43% over 2005)