Business group calls for freeze on CPP premiums set to rise Jan. 1

Business group calls for freeze on CPP premiums set to rise Jan. 1


The Canadian Federation of Impartial Enterprise has requested the federal authorities to carry Canada Pension Plan premiums at present ranges subsequent yr after they’re scheduled to rise.

The nationwide foyer group for small and mid-sized companies says that larger CPP charges can be a monetary burden to each employers and staff as they battle with the pandemic.

The CFIB estimates that one-third of small companies are presently shedding cash through the pandemic and better payroll taxes will restrict their skill to rent and pay staff.

CFIB says staff may additionally see their take-home pay fall when their CPP premiums go up.

The CFIB has lengthy opposed a plan to steadily elevate premiums for the CPP and its Quebec counterpart over a number of years to enhance retirement advantages for workers over the long run.

Beneath the plan, employers and staff pay matching premium charges based mostly on earnings above $3,500 as much as a full-year cap that’s adjusted every year to account for inflation.

CFIB president Dan Kelly says larger bills like pension premiums are exhausting for small companies any yr and can be even more durable in 2021 due to COVID-19.

CFIB president Dan Kelly says a CPP premium hike may imply employers maintain again on pay will increase. (Chris Younger/The Canadian Press)

“Let’s not neglect that the premium hike hits staff too, making certain that each working Canadian will see a drop of their take-home earnings except their employer is ready to give them a bigger elevate on Jan. 1,” Kelly mentioned in an announcement.

In 2021, the employer’s contribution charge for the CPP is scheduled to rise to five.45 per cent of an worker’s pensionable earnings, up from 5.25 per cent this yr. Annual contributions can be capped at $3,116.45 for either side of the equation.

CFIB says which means employers and staff will see their primary CPP premiums rise by 3.eight per cent in 2021, in contrast with this yr, and the utmost quantity of earnings topic to annual premiums paid by either side may rise as a lot as 9 per cent, if a employee’s annual earnings is $60,000 or extra.

“Given the tough state of affairs many smaller companies are dealing with merely attempting to carry on to their employees, now isn’t the time to boost taxes,” Kelly mentioned.

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