2008 EI and CPP/QPP Premiums are Released
Canadian employers and their employees will pay lower Employment Insurance Premiums in 2008, and there will be no increase in CPP/QPP contribution levels.
Employment Insurance
As of January 1, 2008, the employee EI contribution rate per $100 of insurable earnings will be adjusted to $1.73, a reduction of seven cents from its current level of $1.80. The corresponding employer rate will be adjusted to $2.42, a reduction of 10 cents from its current level of $2.52.
The 2008 EI rate will decline 3.9% from the 2007 rate and this is the fourteenth consecutive rate reduction since 1994, when the employee rate was $3.07.
The Maximum Insurable Earnings (MIE) represents the ceiling up to which EI premiums are collected and therefore also the maximum amount considered in an application for EI benefits. The MIE will rise from $40,000 to $41,000.
The EI premium rate for Quebec will be $1.39 for employees and $1.95 for employers. Starting in January 2006, this province began offering its own parental benefits, resulting in a saving for the EI program and explaining the difference with the rate for the rest of Canada. The maximum amount of EI benefits payable of $435/week is the same as in the rest of the country.
CPP/QPP
The maximum pensionable earnings under the Canada Pension Plan for 2008 will be $44,900—up from $43,700 in 2007. Contributors who earn more than $44,900 in 2008 are not required or permitted to make additional contributions to the CPP. In addition,
- The basic exemption amount for 2008 remains at $3,500 and individuals who earn less than that amount do not need to contribute to the CPP.
- The employee and employer contribution rates for 2008 will remain unchanged at 4.95%, and the self-employed contribution rate will again total 9.9%.
- The maximum employer and employee contribution to the plan for 2008 will be $2,049.30, and the maximum self-employed contribution will be $4,098.60 as compared to 2007 maximums of $1,989.90 and $3,979.80.
Contribution levels, the maximum pensionable earnings and the basic exemption under the Quebec Pension Plan will mirror CPP figures in 2008. However, maximum contributory earnings of $41,400 are lower.
Source: Smolkin, Sheryl. Employee Benefit News Canada (November 6, 2007)
