Increases in the average Canadian wage have bumped up the maximum pensionable earnings
The Canada Revenue Agency is raising the Canada Pension Plan maximum pensionable earnings for next year to accommodate the growth of Canadian wages and salaries.
The new maximum for 2006 will be $42,100 — up from $41,100 in 2005.
The basic exemption amount for 2006 remains $3,500 — individuals who earn less than that amount don’t have to contribute — while those who earn more than $42,100 aren’t permitted to make additional contributions.
The employee and employer contribution rates for 2006 will remain unchanged at 4.95%, and the self-employed contribution rate will remain unchanged at 9.9%.
The maximum employer and employee contribution to the plan for 2006 will be $1,910.70, and the maximum self-employed contribution will be $3,821.40. The maximums in 2005 were $1,861.20 and $3,722.40, respectively.