--000000000000a38d950625b4a763 Content-Type: text/plain; charset="UTF-8" Content-Transfer-Encoding: quoted-printable Good afternoon, Quick Note for Everyone: The CRA introduced second CPP/QPP contributions (CPP2/QPP2) began on January 1, 2024. They are additional CPP contributions for workers who earn higher wages. CPP2/QPP2 contributions are made in addition to base CPP/Qpp and first additional CPP/QPP contributions. It is important to understand: - the first earnings ceiling - the second earnings ceiling Workers earning annual wages over a certain amount, the first earnings ceiling, will make CPP2/QPP2 contributions up to the second earnings ceiling. What are the first and second earnings ceilings The first earnings ceiling is the eligible income on which you make CPP/QPP contributions. It is formally known as the year=E2=80=99s maximum pensionab= le earnings, or YMPE. The first earnings ceiling, or YMPE, will be $68,500 in 2024. In 2024, the second earnings ceiling, known as the year=E2=80=99s additiona= l maximum pensionable earnings, or YAMPE, will be introduced. The amount of the second earnings ceiling is based on the amount of the first earnings ceiling. The amount of the second earnings ceiling is: - approximately 7% higher than the first earnings ceiling in 2024 - approximately 14% higher than the first earnings ceiling in 2025 and following years In 2024, the second earnings ceiling will be $73,200. In 2025, and every year after, the amount of the second earnings ceiling will be approximately 14% above the amount of the first earnings ceiling. How second additional CPP/QPP contributions are calculated CPP2/QPP2 contributions are made by anyone who earns wages above the first earnings ceiling. CPP2/QPp2 are calculated as a percentage of wages above the first earnings ceiling up to the amount of the second earnings ceiling. - Employees contribute 4% of the amount they earn between the first earnings ceiling and the second earnings ceiling - Self-employed individuals contribute 8% of the amount they earn between the first earnings ceiling and the second earnings ceiling If you earn more than the first earnings ceiling, but less than the second earnings ceiling: Employees who earn more than the first earnings ceiling, but less than the second earnings ceiling, will contribute 4% of the amount they earn that is above the first earnings ceiling. Their employers will also contribute 4% on their behalf. Self-employed individuals who earn more than the first earnings ceiling, but less than the second earnings ceiling, will contribute 8% of their net business income above the first earnings ceiling. CPP2/QPP2 contribution rates: - 4% for both employers and employees - 8% for self-employed individuals If you earn less than the first earnings ceiling, you will not make CPP2/QPP2 contributions. You will continue to make base and first additional CPP/QPP contributions of 5.95% if you are an employee or an employer, or 11.9% if you are self-employed.