November 10, 2023

The Canada Revenue Agency (CRA) has announced the contribution percentages, limits, and amounts which will apply for purposes of the Canada Pension Plan (CPP) during 2024. Those figures include changes which will create a second level of contributions for higher income individuals.

First level (CPP1) contributions will be made by individuals earning between $3,500 and $68,500. Employee and employer CPP1 contribution rates for 2024 remain at 5.95%, and the maximum contribution will be $3,867.50 for each of the employer and employee. The contribution rate for self employed individuals, who pay both the employer and employee contributions, will remain at 11.90%, and the maximum contribution will be $7,735.00.

Second level (or CPP2) contributions will be made by individuals on income for the year between $68,500 and $73,200. Employee and employer CPP2 contribution rates for 2024 will be 4.00%, and the maximum contribution will be $188.00 each. As is the case with CPP1 contributions, self-employed individuals will pay both the employer and employee contributions, meaning that they will pay 8.00% of income between $68,500 and $73,200, or a maximum CPP2 contribution of $376.00.

Details of the contribution structure and amounts for 2024 are outlined in a CRA Tax Tip, which can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/maximum-pensionable-earnings-contributions-2024.html.