Canada Revenue Agency announces maximum pensionable earnings for 2020

The maximum pensionable earnings under the Canada Pension Plan (CPP) for 2020 will be $58,700—up from $57,400 in 2019. The new ceiling was calculated according to a CPP legislated formula that takes into account the growth in average weekly wages and salaries in Canada.

Contributors who earn more than $58,700 in 2020 are not required or permitted to make additional contributions to the CPP.

The basic exemption amount for 2020 remains at $3,500.

The employee and employer contribution rates for 2020 will be 5.25%—up from 5.1% in 2019, and the self-employed contribution rate will be 10.5%—up from 10.2% in 2019. The increase in contribution rate is due to the CPP enhancement which was implemented on January 1, 2019.

The maximum employer and employee contribution to the plan for 2020 will be $2,898.00 each and the maximum self-employed contribution will be $5,796.00. The maximums in 2019 were $2,748.90 and $5,497.80