A new calendar year requires updates to your payroll deductions. Rather than searching various government web sites, review our summary below to update your payroll system for 2021. If you are looking for a complete and hassle-free payroll solution, try Payworks, a trusted CFIB partner. CFIB members receive an exclusive 40% discount.
Employment Insurance (EI)
Maximum insurable earnings: $56,300
Maximum employee premium: $889.54
Maximum employer premium: $1,245.36
Employee rate: 1.58%
Employer rate: 1.58% x 1.4 = 2.21%
Some employees related to the employer may be exempt from paying EI premiums. Read our article to learn more.
There is no age limit for deducting EI premiums.
Canada Pension Plan (CPP)
Maximum pensionable earnings: $61,600
Basic exemption: $3,500
Maximum employee premium: $3,166.45
Maximum employer premium: $3,166.45
Self-employed maximum premium: $6,332.90
Employer and employee contribution rate: 5.45%
Self-employed contribution rate: 10.9%
CPP is deducted for employees between 18 and 69 years old, even if the employee is receiving a CPP pension. Exception: Don’t deduct CPP if the employee is between 65 and 70 and has completed Form CPT30.
Federal and Provincial income tax
Basic deduction (basic personal amount):
- Federal: $13,808
- Provincial: $16,225
For deductions based on different income levels, see: