Effective January 1, 2022 the contribution deduction rate for Canada Pension Plan (CPP) will be increasing from 5.45% to 5.7% of your gross earnings. Effective January 1, 2022 the contribution deduction rate for Quebec Pension Plan (QPP) will be increasing from 5.9% to 6.15% of your gross earnings.
The reason for this change:
A one percent increase to the CPP/QPP contribution rate is being phased in gradually. This increase began in 2019 and will be completed in 2023.
Benefit of this proposed change:
Currently the income replacement from CPP/QPP for those who contribute for 40 years is 25% of their average pensionable earnings. With this enhancement, anyone participating in the new proposed plan for 40 years will have an income replacement of 33% of their average pensionable earnings.
Future increases are outlined below:
CPP 2022………….5.7% CPP 2023………….5.95%
For every $100 of earnings the increase in CPP contribution will be an additional 20 cents.
QPP 2022…………6.15% QPP 2023…………6.4%
For every $100 of earnings the increase in QPP contribution will be an additional 20 cents.
For more information on these retirement programs, please visit:
The CRA information updated contribution and deduction limits for registered plans in 2022, including, pension/RRSP/ YMPE and TFSA limits can be found here.
