$7,000: CPP Premiums Increase Challenging Gig Workers

CRA has announced the CPP maximum pensionable earnings and premiums payable by employers and employees for 2022.  Self-employed gig workers will want to be sure they understand the obligation:  $6,999.60 is required to be remitted – just forty cents less than $7,000 – if net income is $64,900 or higher.  For others with lower income levels the employer/employee rate is 5.70% each.  Your taxes will need to be remitted about that.  Here are the details:

Maximum pensionable earnings for 2022 are $64,900. No premiums are required if income for the calendar year is higher than that.  There is also a basic exemption of $3500 for everyone.  No contributions are required if income for the year is less than that.

The contribution rate on income, after exemption is 5.70% for each of the employer and employee.  For the self employed, both portions must be remitted, and so the rate is 11.40%, as summarized below:

Planning:  If possible, tuck away money now to make your 2022 TFSA contribution of $6000.   Then budget your CPP obligations.  For self-employed people with incomes at the maximum level that will require $583.30 a month.

Additional educational resources:

The November 10, 2021 Virtual CE Summit will address year-end tax planning for investors and owner-managers. Check out the comprehensive agenda and be sure to enrol by the November 3 early-bird deadline.