The Canada Revenue Agency (CRA) has recently announced the maximum pensionable earnings for 2021 will be $61,600, up from $58,700 in 2020. This represents close to 5% increase.
Contributors who earn more than $61,600 in 2021 are not required or permitted to make additional contributions to the Canada Pension Plan (CPP).
The basic exemption amount for 2021 remains as $3,500.
The CRA announced the increase in YMPE reflects the growth in average Canadian weekly wages and salaries, calculated using a CPP legislated formula.
The 2021 contribution rate for employees and employers has increased to 5.45%, an in crease of .20% (5.25% in 2020). The 2021 contribution rate for self-employed has increased to 10.9% from 10.5% in 2020.
The 2021 maximum employer and employee contribution has increased to $3,166.45 from $2,898.00 in 2020.
The 2021 maximum self-employed contribution has increased to $6,332.90 from $5,796.00 in 2020.