Question

Your employee is 27 years old and earned $257.65 of pensionable earnings this pay cycle. He is paid weekly in the Province of Ontario. Calculate his CPP deduction.

Answer 1

Answer :-

CCP deduction :- ( we are calculating ccp deduction as per year 2019 )

step 1 - Calculate the basic pay-period exemption -

we divide the basic yearly exemption ($3,500 for 2019) as per 2019 CPP basic exemption amount by pay period

our pay period is weekly so $3,500 ÷ 52 = 67.30

step 2 - Calculate the total pensionable income -

so we have total pensionable income as per the question = $257.65

step 3 -  Deduct the basic pay-period exemption from the total pensionable income

so $257.65 - 67.30 = $190.35

step 4 Calculate the amount of CPP deduction -

so multiply step 3 ( result ) by the year’s CPP contribution rate (5.10% for 2019) as per 2019 CPP contributions

then , $190.35 x 5.10% = 9.70 .

so,  his CPP deduction is 9.70.