On November 1st, the Canada Revenue Agency (CRA) announced the maximum pensionable earnings for 2020 will be $58,700, up from $57,400 in 2019.
Contributors who earn more than $58,700 in 2020 are not required or permitted to make additional contributions to the Canada Pension Plan (CPP).
The basic exemption amount for 2020 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 2020 contribution rate for employees and employers has increased to 5.25% from 5.1% in 2019. The 2020 contribution rate for self-employed has increased to 10.5% from 10.2% in 2019.
The increase in contribution rate is due to the CPP enhancement implemented in January 2019 as reported by the CRA.
The 2020 maximum employer and employee contribution has increased to $2,898 from 2,748.90 in 2019.
The 2020 maximum self-employed contribution has increased to $5,796 from $5,497.80 in 2019.