Maximum CPP Premiums Rise at Double the Rate of Inflation
CRA has just announced the maximum contributory earnings for 2012 under the CPP, and those figures generate a premium increase which at the maximum level will reach $2306.70 or $192.23 per month.
Both employer and employee are required to contribution, which means that proprietors will pay $384.45 a month or $4613.40 when their contributory earnings are $50,100. The basic exemption remains at $3,500 (this amount has not been indexed to inflation for years) and therefore we see that premiums have actually increased by 4%.
Meanwhile the expected rate of CPI inflation for 2012 has just been announced as well: it's 2%. That's quite a hike.This means that the maximum CPP pension for 2012 will be $986.67 per month. (Average of maximum pensionable earnings for last five years x 25% / 12 months)
