What is the CPP enhancement?

The CPP enhancement was designed to increase retirement income for working Canadians and their families.

On January 1, 2019, most Canadian employees, employers, and self-employed individuals started to make additional contributions to the CPP as part of the CPP enhancement. Anyone contributing to the CPP enhancement after January 1, 2019 will receive an increased amount of CPP retirement pension, post-retirement benefit, disability pension, and survivor’s pension when they retire.

Second additional CPP contributions: 2024 to 2025

The second additional CPP contributions (CPP2) begin on January 1, 2024. They are additional CPP contributions for workers who earn higher wages. CPP2 contributions are made in addition to base CPP and first additional CPP contributions.

It is important to understand:

  • the first earnings ceiling
  • the second earnings ceiling

Workers earning annual wages over a certain amount, the first earnings ceiling, will make CPP2 contributions up to the second earnings ceiling.

What are the first and second earnings ceilings

The first earnings ceiling is the eligible income on which you make CPP contributions. It is formally known as the year’s maximum pensionable earnings, or YMPE. The first earnings ceiling, or YMPE, will be $68,500 in 2024.

In 2024, the second earnings ceiling, known as the year’s additional maximum pensionable earnings, or YAMPE, will be introduced. The amount of the second earnings ceiling is based on the amount of the first earnings ceiling.

The amount of the second earnings ceiling is:

  • approximately 7% higher than the first earnings ceiling in 2024
  • approximately 14% higher than the first earnings ceiling in 2025 and following years

In 2024, the second earnings ceiling will be $73,200.

In 2025, and every year after, the amount of the second earnings ceiling will be approximately 14% above the amount of the first earnings ceiling.

How second additional CPP contributions are calculated

CPP2 contributions are made by anyone who earns wages above the first earnings ceiling. CPP2 are calculated as a percentage of wages above the first earnings ceiling up to the amount of the second earnings ceiling.

  • Employees contribute 4% of the amount they earn between the first earnings ceiling and the second earnings ceiling
  • Self-employed individuals contribute 8% of the amount they earn between the first earnings ceiling and the second earnings ceiling

If you earn more than the first earnings ceiling, but less than the second earnings ceiling:

Employees who earn more than the first earnings ceiling, but less than the second earnings ceiling, will contribute 4% of the amount they earn that is above the first earnings ceiling. Their employers will also contribute 4% on their behalf.

Self-employed individuals who earn more than the first earnings ceiling, but less than the second earnings ceiling, will contribute 8% of their net business income above the first earnings ceiling.

CPP2 contribution rates:

  • 4% for both employers and employees
  • 8% for self-employed individuals

If you earn less than the first earnings ceiling, you will not make CPP2 contributions. You will continue to make base and first additional CPP contributions of 5.95% if you are an employee or an employer, or 11.9% if you are self-employed.

Unique

Client Service Manager

Behind every well-run business is a bookkeeper who truly cares, and Unique brings that care to every set of books she manages. With over five years of experience across bookkeeping, accounting and taxes, she is skilled at keeping finances organized and streamlined with business owners in mind. Recognized for her attention to detail, clear communication, and calm problem-solving approach, Unique believes great bookkeeping is about more than balancing the books. It is about building trust, maintaining consistency, and supporting clients every step of the way. When she is not focused on finances, you will often find her enjoying a good movie, hanging out with family and friends or relaxing with music.

Vaidehi

Bookkeeper

Meet Vaidehi, a dedicated and professional Bookkeeper since 2021, who proudly supports and assists her clients. Her efficiency and expertise shines through her seamless handling of her clients’ financial records including Accounts Receivable, Accounts Payable, Bank Reconciliation and client communication. Trust Vaidehi to provide the support and solutions you need. During her personal time, Vaidehi enjoys dancing, cooking and tending to her garden.

Tinna

Bookkeeper

Introducing Tinna, a resourceful and dynamic Bookkeeper with over 12 years of hands-on experience. An expert in all aspects of accounting and finance operations, she handles preparation and maintenance of statutory accounting books, reconciling revenue and expenditure accounts, overseeing the preparation of monthly, quarterly, bi-annual and year-end financial statements, implementing stellar accounting systems and controls, budgeting and financial projections. Tinna’s solid background in managing both financial and non-financial assets, investigating and auditing accounts, makes her an asset to the Fiscal Performance team.

Olusegun

Client Service Manager

If you’re seeking a bookkeeper with a passion for precision, a friendly demeanor, and a love for the beautiful game of soccer, then look no further than Olusegun. With over 10 years of experience with auditing and financial analysis, Olusegun brings a unique blend of expertise and enthusiasm to the table. Known for his approachable demeanor and willingness to go the extra mile, he’s not just your typical accountant – he’s a trusted ally in your company’s full cycle financial management. So, if you’re in need of a bookkeeper (with auditing know-how) who gets the job done, valuing integrity and reliability as part of every job, Olusegun is your go-to guy!

Tracy Khamis

RWM, CPB, DFA – Bookkeeping Services Specialist™

Managing Director

Always wanting to learn and gain knowledge, Tracy has worked for multiple companies from various industries. Having the opportunity to work in varied industries from small companies to large organizations such as banks, accounting firms, schools, restaurants, construction, manufacturing and the arts has been extremely exciting. Each industry has different rules that apply, along with different government requirements. This experience has provided Tracy with extensive growth and understanding of bookkeeping, multiple software platforms, and in-depth financial report preparation. To know Tracy is to appreciate what she can do to put your books in order and keep them in a timely, relevant and professional manner.

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