You can download the CRA tax guide below.
https://solidtax.ca/wp-content/uploads/2022/09/t4001-21e-Payroll-Deduction.pdf
What is a payroll remittance?
A payroll remittance is an amount you have to send to the Canada Revenue Agency (CRA) after paying salary or giving a taxable benefit to an employee on your payroll.
A payroll remittance is normally the total of the figures below:
- Employee CPP (Canada Pension Plan) contributions, which is paid by your employee, and you deduct it from your employee’s salary.
- Employer CPP contributions, which are paid by your company and can be claimed as business expenses.
- Employee EI (Employment Insurance) contributions, which is paid by your employee, and you deduct it from your employee’s salary
- Employer EI contributions, which are paid by your company and can be claimed as business expenses.
- Tax deduction, which you deduct from your employee’s salary.
When do I have to deduct CPP contributions?
You must deduct CPP contributions if that employee meets all of the following conditions:
- The employee is in pensionable employment during the year.
- The employee is not considered to be disabled under the CPP.
- The employee is 18 to 69 years old, even if the employee is receiving CPP. Exception: do not deduct the CPP contribution if the employee is at least 65 years of age, but under 70, and gives you Form CPT30, Election to Stop Contribution to the CPP.
Do not deduct the CPP contribution for the following types of employment:
- Employment in agriculture, horticulture, fishing, hunting or forestry.
- Casual employment if it is for a purpose other than your usual business.
How to calculate CPP contributions
Each year, the CRA will determine all of the following:
- The maximum pensionable earning from which you deduct CPP.
- The year’s basic exemption, which is a base amount from which you do not deduct a CPP contribution.
- The rate you use to calculate the amount of CPP contributions to deduct from your employees’ salary
| Canada Pension Plan - CPP | 2020 | 2021 | 2022 |
| Max Pensionable Earning | 58,700 | 61,600 | 64,900 |
| Basic Exemption | 3,500 | 3,500 | 3,500 |
| Rate | 5.25% | 5.45% | 5.70% |
| Employee/Employer Max | 2,898.00 | 3,166.45 | 3,499.80 |
| Self-employed Max | 5,796.00 | 6,332.90 | 6,999.60 |
For example, if you pay your employee an annual salary of $50,000 in 2022, the employee CPP contribution will be (50,000-3,500) x 5.7% = $2,650.50; and the employer CPP contribution will be same amount, $2,650.50. The total CPP contribution and remittance to the CRA is $2,650.5 x 2 = $5,301.
When to deduct EI premiums
You must deduct EI from each dollar up to the yearly maximum. There is no age limit for deducting the EI premium.
Payment for the following types of employment are not insurable and EI premiums do not have to be deducted:
- Causal employment
- Corporation directors, or a person who controls more than 40 per cent of the corporation’s voting shares.
How to calculate EI deduction
You must deduct EI premiums from your employee’s insurable earnings. As an employer, you must contribute 1.4 times the amount of the EI premiums that you deduct from your employee’s salary.
| Employment Insurance EI | 2020 | 2021 | 2022 |
| Max Annual Insurable Earnings | 54,200 | 56,300 | 60,300 |
| Rate | 1.58% | 1.58% | 1.58% |
| Max Annual Employee Premium | 856.36 | 889.54 | 952.74 |
| Max Annual Employer Premium | 1,198.90 | 1,245.36 | 1,333.84 |
For example, if you pay your employee an annual salary of $50,000 in 2022, the employee EI contribution will be 50,000 x 1.58% = 790. The employer EI contribution will be 1.4 x 790 = 1106. The total EI contribution will be 790 + 1106 = $1,896.
