Are You Collecting & Remitting CPP Correctly?
Knowing the ins-and-outs of CPP (Canadian Pension Plan) can avoid you having to pay penalties due to not remitting the proper amount on behalf of your employees. In fact, if you know the rules, you may find that you don’t have to remit in certain cases at all.
As an employer you are required to match employee CPP contributions. For example, if an employee must remit $1,000 for a CPP, then you have to remit the same amount. If you receive a notice of assessment, or if you discover that you have “under-deducted” CPP contributions, it’s your responsibility to remit the balance due (this includes both the employer’s and employee’s share).
However, if your employee is 65 to 70 years old, and has submitted a Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, you may not have to pay CPP at all. Similarly, if your employee is under 18, you are not obligated to deduct CPP contributions from that staff member’s pensionable earnings.
Basically, the same formula from above applies. You must match your employee’s contribution; If they are contributing $0, then you can contribute $0. It’s all about knowing when to pay and when not to pay.