Fusion Global Payroll (CA): Canadian Pension Plan And Quebec Pension Plan Tax Changes for 2019
(Doc ID 2474052.1)
Last updated on FEBRUARY 25, 2020
Applies to:Oracle Fusion Global Payroll Cloud Service - Version 11.13.18.05.0 and later
Information in this document applies to any platform.
Will the Canadian Pension Plan and Quebec Pension Plan Tax Changes be added during the December patch?
More Details :
Starting in 2019, the Canada Pension Plan (CPP) will be gradually enhanced. This means you will receive higher benefits in exchange for making higher contributions.
The CPP enhancement will only affect you if, as of 2019, you work and make contributions to the CPP.
The enhancement will increase CPP retirement, disability and survivor’s pensions you may receive. Eligibility for CPP benefits will not be affected. For more information about eligibility for CPP benefits, visit:
•CPP retirement pension
•CPP post-retirement benefit
•CPP disability benefit
•CPP survivor's pension
If you only work in Quebec, you contribute to the Quebec Pension Plan (QPP) and the CPP enhancement does not affect you.
Effects on CPP retirement pension and post-retirement benefit
Up until 2019, the CPP retirement pension replaces one quarter of your average work earnings. This average is based on your work earnings, up to a maximum earnings limit each year. Other sources of income—such as the Old Age Security program, workplace pensions and private savings—make up the rest of your retirement income.
In 2019, the CPP will begin to grow to replace one third of your average work earnings. The maximum limit used to determine your average work earnings will also gradually increase by 14% by 2025.
As a result, pension amounts will increase by more than 33%. Your pension will increase based on how much and for how long you contribute to the enhanced CPP. You will get the full increase if you contribute to the enhanced CPP for 40 years.
The enhancement also applies to the CPP post-retirement benefit. If you are receiving the CPP (or QPP) retirement pension and you continue to work and make CPP contributions in 2019 or later, your post-retirement benefits will be larger.
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