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January 2013 Newsletter

2013 Canada Pension Plan (CPP) Update

January-banner

The following changes have been made:

  • The Yearly Maximum Pensionable Earnings (YMPE) for 2013 have been increased to $51,100 from $50,100
  • Maximum employee and employer contribution for 2013 has been changed to $2,356.20 from $2,306.70, and the self-employed contribution is $4,712.40 ($4,613.40 in 2012)

The following items remain the same:

  • The CPP exemption rate remains at $3,500
  • Employee/employer contribution rates remain unchanged at 4.95%, and the self employed contributions are still at 9.9%

¹The CPP was amended in 2011 to implement a new Post-Retirement Benefit (PRB), a fully indexed lifetime benefit that increases retirement income. Canadians working outside of Quebec who receive a CPP or QPP retirement pension could begin making CPP contributions toward the PRB commencing January 1, 2012. Contributions to the PRB are mandatory for working pension recipients under age 65, while those aged 65 to 70 may elect not to contribute. Contributions cannot be made to the PRB after age 70. The PRB will be automatically paid to eligible recipients the year following contributions; as such, 2013 is the first year that these benefits will be paid. More information is available on the Service Canada website at www.servicecanada.gc.ca/cppchanges

Employment Insurance (EI) maximum increases effective January 1, 2013

Effective January 1, 2013, the annual maximum insurable earnings will increase to $47,400 from the existing $45,900. As a result, the maximum weekly EI benefit rate will increase to $501 from the current amount of $485.

The EI premium rate for workers will increase to $1.88 for every $100 of salary up to $47,400. The corresponding employer rate will also increase to $2.63. For Quebec, the EI premium rate will be set at $1.52 for workers and $2.13 for employers. This lower premium rate is due to Quebec’s delivery of its own parental benefits since January 2006.

For more information regarding EI benefits, please visit the Service Canada website at www.servicecanada.gc.ca/eng/sc/ei/index.shtml