On January 1, 2024, the government introduced a second earnings ceiling known as the Year’s Additional Maximum Pensionable Earnings (YAMPE). People who have income above the first earnings ceiling will contribute an additional percentage of the income they earn above the first earnings ceiling up to the second earnings ceiling. This additional CPP contribution is part of the CPP enhancement known as second additional CPP contributions (CPP2). It will not replace the first earnings ceiling. Instead, it will subject worker’s earnings to two earnings limits.
| Contribution rate split (employee/ employer) | Contribution rate (self-employed) | YMPE, or first earnings ceiling | YAMPE, or second earnings ceiling | Maximum yearly CPP2 contribution (employee /employer) | Maximum yearly CPP2 contribution (self-employed) |
| 4% | 8% | $68,500 | $73,200 | $188 | $376 |
Starting in 2024, employees and employers will each contribute an additional 4% on earnings above the first earnings ceiling (the YMPE), up to the amount of the second earnings ceiling (the YAMPE). These are their CPP2 contributions. The rates in 2024 will be as follows:
Employees
- When you do your taxes, your CPP contributions must be separated into two parts: CPP base alongside first additional CPP contributions and CPP2 contributions (starting in 2024). Base contributions are calculated at a rate of 4.95% while first CPP contributions are calculated at a rate of 1%. Both are reported together in Box 16 on the T4 slip. Box 16A will be added to the T4 slip to report any CPP2 contributions starting with the 2024 tax year. Any year you do not make CPP2 contributions, Box 16A will be left blank.
- You can claim a 15% non-refundable tax credit for your base CPP contributions. You will claim a tax deduction for the enhanced portions such as first additional and CPP2 contributions.
- automatically separate and apply the base and enhanced contributions for you.
Employers
- Withhold and remit CPP2 contributions the same way as base and first additional CPP contributions.
- Report employees base and first additional CPP contributions in Box 16 on the T4 slip. For T4 slips filed for calendar year 2024 and after, report the amount of CPP2 contributions you deducted from your employee in Box 16A.
- Do not report any amount using Box 16A if you did not deduct CPP2. All employer contributions to the CPP are tax deductible.
Self-employed
- Send your CPP contributions when you file your T1 return.
- Your contributions are based on net business income.
- When you do your taxes, you will separate your CPP contributions into two parts: CPP base alongside first additional CPP contributions, and CPP2 contributions (starting in 2024). The base contribution is the amount that is calculated at a rate of 9.9%, and first additional CPP contributions are calculated at a rate of 2%. You can claim a 15% non-refundable tax credit on 4.95% of the base CPP contributions, and claim a tax deduction on the other 4.95%. You can also claim a tax deduction on the enhanced portion of your contributions (2%). Starting in the 2024 tax year, CPP2 contributions will be calculated at a rate of 8%. All CPP2 contributions are tax deductible.