Common Questions About Canadian Payroll

CPP (Canada Pension Plan) and EI (Employment Insurance) are two separate mandatory deductions. For 2024, employees contribute 5.95% of earnings to CPP (up to the year’s maximum pensionable earnings of $68,500), and employers match that amount. EI works differently by province—rates range from 1.62% to 1.66% for employees in most provinces, with employers paying about 1.4 times the employee rate. You need to track both separately because they have different remittance deadlines and annual maximums.

Remittance schedules depend on your payroll size. Most small businesses remit monthly by the 15th of the following month, but if you’re deducting less than $3,000 per month on average, you can remit quarterly. Larger employers with monthly deductions over $25,000 must remit twice monthly. Missing these deadlines triggers penalties—typically 10% of the amount owed if you’re 1-3 days late, increasing from there.

T4 slips report your employees’ income and deductions for the tax year. Box 14 shows total income, boxes 16-20 show CPP contributions, boxes 24-26 show EI amounts, and you’ll also report provincial tax info. You need to file T4s with CRA by February 28th (March 15th if filed electronically) and provide copies to employees by the same date. Most payroll software calculates this automatically, but you should always reconcile totals against your payroll records to catch errors before filing.

Yes. Employees under 18 or over 70 don’t contribute to CPP (though employers still do if the employee is under 70). Self-employed people pay both employee and employer portions of CPP (9.9% for 2024). For EI, you don’t deduct from employees earning above the maximum insurable earnings ($63,200 for 2024), and certain workers like farmers or fishermen are exempt. Always check provincial rules too—they can add extra exemptions.

For T4 errors, you can file an amended slip (T4A or T4-Amended) before the deadline or within three years after the original due date. Late remittances cost you—penalties start at 10% of the amount due, plus compound interest daily. If you miss the T4 filing deadline, you’ll face a $100 per form penalty (minimum $250). It’s worth setting calendar reminders and running test payroll reports a week before each deadline to catch issues early.

Yes—EI premiums vary by province (Quebec runs its own plan), and provincial tax withholding rates are different from federal rates. Some provinces also have additional payroll taxes or health levies. For example, Ontario employers pay a small EHT (employer health tax) at 0.98% if payroll exceeds $450,000 annually. You’ll need to account for your province’s specific rules in your payroll setup, and CRA’s payroll deductions online calculator helps you get the right provincial amounts.