Here are some quick updates about Canada Pension Plan (CPP) and Employment Insurance (EI) premium changes in 2022. Thank you to Shauna Frederick of On the Go CFO for this handy summary.
You want an accurate picture of your cash flow and budget in 2022. Here are some quick updates about Canada Pension Plan (CPP) and Employment Insurance (EI) premium changes in 2022.
Canada Pension Plan (CPP)
CPP premiums increase January 1st from 5.45% of your employee's earnings to 5.7%. Moreover, the maximum pensionable earnings is set at $64,900, up from last year’s limit of $61,600.
That means that employees who earn more than $64,900 in 2022 do not make additional contributions to the CPP. Employer and employee contributions will be maxed at $3,499.80, up from the $3,166.45 from last year.
Bottom Line:
your potential increase in payroll contributions (cash outflow) will increase by a maximum of $333.35 annually per employee.
your employee’s payroll deductions will potentially increase by a maximum of $333.35 annually (reduced take home pay).
If you’re self-employed, contributions will be maxed at $6,999.60 compared with $6,332.90 in 2021.That means your CPP premiums will increase by a maximum of $666.70 per year.
Employment Insurance (EI)
Premiums for Employment Insurance remains unchanged for 2022 at 1.58%. The maximum pensionable earnings is set at $60,300, up from last year’s limit of $56,300.
That means that employees who earn more than $60,300 in 2022 will not make additional contributions to EI.
Employee contributions will be maxed at $952.74, up from the $889.54 from last year, which means that employee take-home pay will be reduced by $63.20.
From the employer perspective, contributions to EI premiums will increase by a maximum of $88.48 annually per employee. The 2022 maximum contribution is $1,333.84, up from $1,245.36 in 2021.