What are CPP and EI, and who pays them?
The Canada Pension Plan (CPP) is a mandatory retirement savings program for employees and self-employed individuals. In 2024, employees contribute 5.95% of pensionable earnings (between $3,500 and $68,500) up to a maximum of $3,867. Employers match this contribution dollar for dollar. Employment Insurance (EI) provides income replacement for unemployed workers. Employees contribute 1.66% of insurable earnings (up to $63,200) to a maximum of $1,049. Employers contribute 1.4× the employee premium.
When must an employer remit payroll deductions to CRA?
Remittance frequency depends on your average monthly withholding: Quarterly remitters (new employers or small withholding) remit within 3 months of the quarter. Regular remitters (monthly withholding of $1,000–$25,000) remit by the 15th of the following month. Accelerated remitters — Threshold 1 ($25,000–$100,000) remit twice monthly; Threshold 2 (over $100,000) remit within 3 banking days of payroll. Missing remittance deadlines triggers penalties: 3% for 1–3 days late, 5% for 4–5 days, 7% for 6–7 days, 10% after 7 days, 20% for second failure.
What is a T4 slip and when must it be issued?
A T4 (Statement of Remuneration Paid) summarizes an employee's earnings, income tax deducted, CPP contributions, and EI premiums for the year. Employers must issue T4s to employees and file them with CRA by the last day of February following the tax year. T4s are required for any employee who received more than $500 in remuneration or from whom income tax was deducted. Failure to issue T4s on time results in penalties of $25 per day, minimum $100, maximum $7,500 per employee.