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Payroll 2 > Unit 6 CPP > Flashcards

Unit 6 CPP Flashcards

1
Q

When was CPP first introduced

A

Jan 1, 1966

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2
Q

What are two important facts about CPP

A
  1. takes priority over all other statutory deductions

2. must be the 1St one deducted

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3
Q

What is the age range for deducting CPP

A

age 18 to 70 years (unless disabled according to CPP)

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4
Q

When an employee turns 18 what do you do

A

you have to prorate

- start deducting the first pay following the month they turn 18

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5
Q

how do you prorate CPP

A
  • based on # of months they will be 18 in that year
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6
Q

What is important about age 65 - 70

A

Can elect to stop CPP

  • CPT30 form
  • copy to employer, original to CRA
  • will stop the first pay of the month following the date employer received the form
  • can renstate too if they change their minds
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7
Q

What is important about age 70

A
  • CPP stops with 1St pay of month following their 70th birthday
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8
Q

What is a short list of payments and benefits that do not Qualify as pensionable for CPP

A
  1. Pension payments
  2. Retiring allowances or severance payments
  3. Payments made after death of employee
  4. some WSIB??
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9
Q

What is the annual basic CPP exemption?

A

3,500

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10
Q

What is the maximum pensionable earnings

A

52,500

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11
Q

What is the monthly basic cpp exemption

A

291.66

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12
Q

what is the semi-monthly (24) basic exemption

A

145.83

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13
Q

what is the bi-weekly(26) basic CPP exemption

A

134.61

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14
Q

What is the bi-weekly(27) basic CPP exemption

A

129.62

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15
Q

What is the weekly (52) basic CPP exemption

A

67.30

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16
Q

What is the weekly (53) basic CPP exemption

A

66.03

17
Q

What is the annual Maximum contributions earnings

A

52,500 - 3,500 = 49,000

18
Q

What is the CPP contribution rate

A

4.95% (employer and employee)

19
Q

What is the maximum deduction

A

$2,425.50

20
Q

Ex1: Tim earns $1,000 paid weekly what is his CPP contribution per week

A

1,000 - (3,500 / 52)
1,000 - 67.30 = 932.70
x 4.95%
= 46.17

21
Q

Ex2: Sara earns a salary of $1,236.00 paid bi-weekly.

She also has a monthly pensionable benefit of $75. what is her cpp contribution for each pay

A 
75 x 12 = 900
              / 26
          =34.62 
      \+ 1236.00
     = 1270.62  pensionable earnings
less bi-weekly exemption
          -134.61
=       1136.01
       x 4.95%
          56.24
22
Q

E3: Regular wage pay plus bonus
Joan earns monthly salary of $3,700
Has a monthly taxable benefit of $300.00
a yearly bonus of $2,000 (on separate cheq)

A 
Regular pay         $3700
Taxable benefit       300
Gross income        4,000
Less montly exemption 291.66
contributory earnings 3,708.34
                                        x4.95%
total CPP deduction      183.56

Cheq 2: Bonus
no exemption, was already applied on Chq 1

2,000 x 4.95% = $99.00

total CPP contributions: 282.56

the same would result if it was combined on both cheques

23
Q

Reaching CPP Maximum
John earns a salary of $1,236.00 paid bi-weekly
bi-weekly pensionable benefit of $55.00
already contributed 2,398.00 in cpp this year

A

salary 1236.00
pensionable benefit 55
gross income 1,291.00
less exemption - 134.61
contributiory earnings 1156.39
x 4.95%
57.25

maximum contribution 2425.50
- 2398.
= 27.50
deduct 27.50 an no more for rest of year

24
Q

E5 Employee turns 18 or 70 or dies

mike turns 18 on march 7, 2014

A

2,425.50 / 12 = 202.12
April - dec = 9 months

202.12 x 9 = 1819.12
this is his max contributions for 2014

tables: are helpful on cra website

25
Q

Name 8 pensionable earnings

A
  1. all salary , wages, bonus, and other earnings received from the company
  2. value of taxable benefits received
  3. executive fees received
  4. certain tips and gratuities
  5. earnings received while on leave
  6. wage-loss benefits
  7. stock option benefits
  8. income form any workers compensation claim
26
Q

earnings that do not qualify as pensionable (8)

A
  1. earnings from an agriculture, fishing, hunting, logging if employee less than $250
  2. casual labour but only if you know for an absolute fact that hey will earn less than $3,500 for the year
  3. Teachers on exchange from a foreign country
  4. employment of a spouse if you do not deduct the amount as an expense form your income
  5. employment of a member of a religious order
  6. Employment of a child where no cash remuneration was paid
  7. Employment for a disaster or rescue operation
  8. Employment by a government body as a census take or election worker
27
Q

Other payments and benefits that do not qualify as pensionable for cpp contributions

A
  1. pension payments
  2. retiring allownaces or severance payments
  3. wage-loss benefits paid from an insurance co.
  4. payments made after the death of employee
  5. ad advance or loan by the co. to cover a workers compensation claim
    - the amount must be repaid or cpp must be deducted
  6. an amount equal to a workers compensation award form a self-insured employer
  7. benefits for clergy members

Paul run with dolly Lama and clean

Payroll 2 (18 decks)

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