Canada Increases Pensionable Earnings Limits for 2016

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By Jared Mondschein

Nov. 5—The maximum pensionable earnings under the Canadian Pension Plan will increase to C$54,900 ($41,947) on Jan. 1, 2016 from C$53,600 ($40,954), the Canadian Revenue Agency said Nov. 2 in a news release.

The increase is based on a legislated formula that takes into account the growth in average weekly wages and salaries in Canada, according to the release.

The maximum contributions to the pension plan also are to increase in 2016. The maximum annual employee and employer contribution will increase to C$2,544.30 ($1,944) on Jan. 1, 2016, from C$2,479.95 ($1,894.87) while the maximum annual self-employed contribution will increase to C$5,088.60 ($3,888.08) from C$4,959.90 ($3,789.74).

The basic exemption of C$3,500 ($2,674.27) and the contribution rates of 4.95 percent for employers and employees and 9.9 percent for the self-employed will remain the same for 2016.

The Canadian Pension Plan applies in every province and territory in Canada with the exception of Quebec, which has it's own pension system called the Quebec Pension Plan.

To contact the reporter on this story: Jared Mondschein at

To contact the editor responsible for this story: Michael Baer at

The government news release can be found at

A history of CPP annual contribution rates, maximums and exemptions is available at

More information on payroll issues in Canada can be found in the Canada country primer.

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