When Will My CPP and EI Fill Up?
On your pay stub when you see CPP and EI being deducted you kind of feel that its just another tax, but that isn’t quite true. You contribute to these ‘accounts’ to a preset maximum. Once you have attained that maximum, your contributions will stop.
So what is the maximum and when will you get there? Determining this will require some simple calculation on your part.
When Will They Be Full?
The maximum for CPP for 2008 is: $2,049.30. That is based on a contribution rate of 4.95%. That means that you will have contributed that amount of money to CPP when you have earned $41,400, so once you have earned $41,400 your deductionswill stop. The amounts for previous years (future years will be posted as they become available) is at the CPP Contribution Rate Table.
This means that if you make less than $41,400 then your CPP will not fill up.
The rates for EI are calculated in the exact same way, but with different figures. The maximum contribution to EI for 2008 is: $711.03 (down from 2007!) and it is based on 1.73% of $41,100 annual salary. This can be seen at the EI Contribution Rate Table.
Problems With The System
While this seems like a pretty good system, the problems rest with people who have multiple jobs or who change jobs part way through the year. If you have two jobs, they both start at $0, meaning that you can easily over pay, as well if you change jobs, then you start at $0 again. There is no way to let the government know that you have already paid, nor is there any way to opt out.
To Calculate When It Will Fill Up
Make a spreadsheet that shows dates and how much your normal deduction is. Add up the totals of your deductions for every date, if that date is over the maximum, then that is your end date.
A sample spreadsheet (based on $60,000/year salary) showing when CPP an EI will fill up
Other Links
A good source determining how many months it will take for CPP and EI to fill up at a given salary
(2 votes, average: 5 out of 5)
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