Effective January 1, 2012, employers must deduct CPP contributions for all employees aged 60 to 65, including those already receiving CPP or Quebec Pension Plan retirement pensions that did not contribute to the plans previously.
In addition, employers must also deduct CPP contributions for all employees who are 65 to 70 years of age, unless the employee elects not to contribute to the CPP. To decline making contributions, the employee must provide the employer with a signed and completed copy of Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. He/she must also send the original to the Canada Revenue Agency (CRA).
Employees cannot contribute to the CPP after the month in which they turn 70 years of age.
Failure to deduct CPP contributions or to remit CPP contributions to the CRA as required could result in an assessment by the Canada Revenue Agency that could include penalty and interest charges. For more information, go to cra.gc.ca/payroll and select “Penalties, interest, and other consequences.”
Employees working in Quebec and other workers not subject to the CPP will not be affected by these changes.
For more information about what the changes mean for employers, visit cra.gc.ca/cppchanges-employers.