T4 Box 16/17 - Employee Pension Contributions (CPP/QPP)

The software calculates the required CPP/QPP contribution for each employee based on the pensionable earnings in box 26. If the amount deducted by the employer differs from the calculated amount, override box 16/17 and enter the actual deduction. Leave the box blank if the employee did not contribute to either plan.

Do not report the employer's contribution to the CPP or the QPP on the T4 slip.

If the deducted amount differs from the calculated amount, read the T4/RL-1 - Employment Income help topic if you want to make an adjustment.

Reporting change for pensionable earnings

Under the previous rules (before January 1, 2012), as an employer you had to stop deducting CPP contributions from an employee's pensionable earnings when the employee:

  • was 60 to 70 years of age; and
  • gave you proof that he or she was receiving a CPP or Quebec Pension Plan (QPP) retirement pension (for example, an award letter issued by Human Resources and Skills Development Canada).

Since January 1, 2012, you may have to deduct CPP contributions from the pensionable earnings you pay an employee who is 60 to 70 years of age, even if the employee is receiving a CPP or QPP retirement pension.

Under the new rules, an employee who works and receives a CPP or QPP retirement pension now has to contribute to the CPP if he or she is:

  • 60 to 65 years of age;
  • 65 to 70 years of age, unless the employee has filed an election with you or another employer to stop paying CPP contributions (the election will take effect on the first day of the month following the month the employee provides you with a completed and signed election form);
  • 65 to 70 years of age, if the employee revoked his or her election to stop paying CPP contributions in 2013 or later.

Notes
These legislative amendments do not affect the salary or wages of an employee who is considered to be disabled under the CPP or QPP, nor do they affect the salary and wages of a person who has reached 70 years of age. Do not deduct CPP contributions from the salary and wages that you pay these employees.

Employees working in Quebec and other workers not subject to the CPP are not affected by these changes.

For more information about these changes, consult the page Changes for employers on the CRA Web site.

CPP Proration

The CPP contribution must be prorated in the following circumstances:

  • the employee turns 18 in the year;
  • the employee turns 70 in the year;

  • the employee starts receiving a retirement pension from the CPP or the QPP, is between 65 and 70 years of age and has elected to stop contributing to the CPP;

  • the employee is considered to be disabled under the CPP or QPP;
  • the employee dies in the year.

In these cases, first override box 26 to enter the difference between the employee’s total income for the year (box 14) and the remuneration paid to the employee in any one of the following periods:

  • before and during the month the employee turned 18;
  • after the month the employee turned 70;
  • during the months the employee was considered to be disabled under the Canada or Québec Pension Plan;

  • the period starting the first day of the month following the month where the employee gave you a copy of form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election;

  • after the month the employee died.

Then, enter the number of weeks during which the employee was eligible to contribute to the CPP in the box titled "Periods of pensionable employment CPP/QPP." Enter the number of weeks included in either:

  • the period after the employee turns 18;
  • the period before the employee turns 70;

  • the period prior to the first day of the month following the month where the employee gave you a copy of form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election;

  • the period during which the employee was not considered disabled; or
  • the period before death.

QPP Proration

Contributions to the QPP also have to be prorated, but only in the following circumstances:

  • the employee turns 18 in the year;
  • the employee is considered to be disabled under the CPP or QPP;
  • the employee dies in the year.

In such cases, proceed as indicated above in the CPP section. Do not forget, however, to override both box 26 of the T4 slip and box G of the RL-1 slip to enter pensionable earnings.

Note: A proration is not performed in the case of an employee who turns 70 or who begins to receive a retirement pension from the CPP or QPP in the year.