CRA announces CPP max pensionable earnings for 2024
Starting in 2024, the Canada Pension Plan (CPP) introduces a second earnings ceiling, with the maximum pensionable earnings set at $68,500, up from $66,600 in 2023.
Additionally, there will be a new earnings ceiling of $73,200 to calculate extra CPP contributions. Earnings between $68,500 and $73,200 will be subject to these additional contributions as part of the CPP expansion initiated in 2019. The basic exemption amount remains $3,500.
Employee and employer CPP contribution rates for 2024 stay at 5.95%, with a maximum contribution of $3,867.50 each (up from $3,754.45 in 2023). Self-employed individuals contribute double this rate. In the second earnings tranche, the contribution rates for both employees and employers are 4.00%, resulting in a maximum contribution of $188.00 each, with self-employed rates being double.
The Registered Retirement Savings Plan (RRSP) limit for 2024 is $31,560, up from $30,780 in 2023, and it is expected to increase to $32,490 in 2025.
The Tax-Free Savings Account (TFSA) limit for 2024 is expected to rise to $7,000 from the current $6,500.
WAYNE FARROW
Over his 40 year career, Wayne has worked with hundreds of Canadian corporations to design and manage Retirement Savings Programs involving thousands of plan members.
His hands-on approach and involvement at the Plan Member level gives him a unique ability to see things through the eyes of all the stakeholders and most importantly, the Plan Member.
He has literally been there, and done that, on the shop floor, not the 52nd floor.
This experience has allowed him to simplify the plan design and management of retirement programs in such a way that the most important elements are clearly understood by both the Plan Sponsor, and the Plan Member.
As he always says, “if you can’t explain it to an eight year old, then you don’t understand it.”
You can contact Wayne at: wayne@farrowpension.ca