Employer Tax Contributions

Tax Type	Rate (Employer)	Base
Canada Pension Plan (CPP)	5.95% (first earnings ceiling) + 4% (second earnings ceiling)	Earnings between $3,500 and the Year's Maximum Pensionable Earnings (YMPE) for the first rate, and earnings between YMPE and Year's Additional Maximum Pensionable Earnings (YAMPE) for the second rate
Employment Insurance (EI)	1.4 x employee rate (currently $2.30 per $100 of insurable earnings)	Insurable earnings up to $65,700
Income Tax	Varies (deducted from employee wages)	Employee taxable income

Filing & Compliance

• Payroll Remittances: Due by the 15th of the following month for most regular remitters. Quarterly or accelerated deadlines may apply based on remittance volume.
• T4 Slips & Summary: Due to employees and the CRA by the last day of February following the calendar year.
• Electronic Filing: Mandatory for employers filing more than 50 slips.

Canadian employees have several deductions applied to their gross pay, primarily for income tax, Canada Pension Plan (CPP), and Employment Insurance (EI).

Income Tax

Income tax is deducted based on the employee's earnings, province of residence, and TD1 form information. The TD1 form allows employees to claim personal tax credits, reducing the amount of tax deducted. Key elements affecting income tax deductions include:

• Basic Personal Amount: For 2025, the basic personal amount is $16,129. This amount can be reduced if net income exceeds $177,882.
• Other Tax Credits: Additional credits may be available depending on individual circumstances like age, eligible dependents, and pension income.
• Tax Rates and Brackets: Canada employs a progressive tax system with varying rates depending on income levels.

Canada Pension Plan (CPP)

CPP contributions are mandatory for most employed Canadians and provide retirement, disability, and survivor benefits. For 2025:

• Maximum Pensionable Earnings: $71,300
• Basic Exemption: $3,500
• CPP Contribution Rate: The employee and employer each contribute a percentage of earnings up to the maximum pensionable earnings, after deducting the basic exemption. There is an additional CPP enhancement, CPP2, applied to earnings between $71,300 and $81,200
• QPP: Quebec has its own pension plan, the Quebec Pension Plan (QPP), with similar parameters and contribution rates.

Employment Insurance (EI)

EI premiums provide temporary financial assistance to unemployed Canadians. For 2025:

• Maximum Insurable Earnings: $65,700
• Maximum Employee Premium: $1,077.48

Other Deductions

Employers may also deduct other amounts from employee paychecks, including:

• Union Dues: If applicable, union dues are deducted according to collective agreements.
• Benefit Premiums: Contributions to health, dental, or other benefit plans are often deducted from pay.
• Retirement Savings Plan Contributions: Employees can contribute to Registered Retirement Savings Plans (RRSPs) or other retirement plans through payroll deductions.
• Garnishments: Court-ordered deductions like wage garnishments for debt repayment can also apply.

Important Dates and Deadlines

• T4 Slip Deadline: Employers must issue T4 slips to employees by February 28, 2025.
• Tax Filing Deadline: For most employees, the tax filing deadline is April 30, 2025. Self-employed individuals have until June 16, 2025, to file, but taxes owed are still due by April 30, 2025.
• Tax Installment Deadlines: Individuals who owe significant taxes may need to make installment payments throughout the year. The deadlines for 2025 are March 17, June 16, September 15, and December 15.
• RRSP Contribution Deadline: The deadline to make an RRSP contribution and deduct it on your 2024 tax return is February 28, 2025.

This information is based on the current legislation as of February 5, 2025 and is subject to change. It is essential to stay updated on any revisions to tax laws and regulations.