Changes coming to Canada Pension Plan in 2024
The limit of how much of your income you contribute to the Canada Pension Plan (CPP) has increased over the years, but 2024 will see a significant change for middle income earners.
“The change this year that's different is they're adding a second tier to the pension plan,” explained Matt Davison, professor of mathematics and statistical sciences at Western University.
The ceiling for what is now tier one of CPP will rise to $68,500, while additional deductions on people making more than that will be 4 per cent on earnings up to $73,200, but will not exceed $188 per year.
This will also be matched by employers.
“The rate is going to increase, but people in particular, those middle income earners, are going to be paying for longer because there's going to be a second threshold until which they pay at a lower rate,” said Christina Santini, director of national affairs for the Canadian Federation of Independent Businesses (CFIB).
The government has been slowly increasing the thresholds for CPP payments, but is now creating a second tier aimed at helping middle income earners prepare for retirement, Davison added.
“The reason for that is Canadians are just having trouble saving enough for retirement. And about 40 per cent of Canadians are really worried that they haven't they're not going to have nearly enough in retirement,” he said.
Not only will employees get hit with more deductions, employers have to match the added payments, on top of increased payments to EI and other programs. Santini said these extra costs could hurt smaller companies.
“For an employer, it's kind of higher payroll taxes. It's something that they have to absorb as part of the cost of doing business. It's something that they have to pay whether or not they're making a profit,” she said.
“The added tier means when those middle income earners retire they will receive a higher payment from CPP, and the threshold is expected to increase year after year,” Santini added.
CTVNews.ca Top Stories
NEW Biscuits with possible plastic pieces, metal found in ground pork: Here are the recalls for this week
Here are the latest recalls Canadians should watch out for, according to Health Canada and the Canadian Food Inspection Agency.
More than half of Canadians say freedom of speech is under threat, new poll suggests
A new poll suggests a majority of Canadians feel their right to freedom of speech is in danger.
Britney Spears 'home and safe' after paramedics responded to an incident at the Chateau Marmont, source tells CNN
A source close to singer Britney Spears tells CNN that the pop star is 'home and safe' after she had a 'major fight' with her boyfriend on Wednesday night at the Chateau Marmont in West Hollywood.
Police move in to clear NYU encampment, U.S. campus arrests grow to 2,200 in pro-Palestinian protests
Police moved in to clear an encampment at New York University on Friday at the request of school officials, a move that follows weeks of pro-Palestinian protests at college campuses nationwide that have resulted in nearly 2,200 arrests by police.
Feds giving Toronto more than $104M to host 2026 FIFA World Cup
The federal government will provide Toronto just over $104 million in funding to host the 2026 FIFA World Cup.
Wally, the emotional support alligator once denied entry to a baseball game, is missing
Emotional support animal registrations in the United States reached 115,832 last year, by an industry group’s count. But in the eyes of reptile rescuer Joie Henney, there’s only one: 'Wally Gator.'
Parents of infant who died in wrong-way crash on Ontario's Hwy. 401 were in same vehicle
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Drew Barrymore explains how she accidentally left a list of her romantic partners at Danny DeVito's house
Danny DeVito had the opportunity to know way more about Drew Barrymore than the rest of us.
'Bare-adise' adventure: This nude cruise is due to set sail from Miami in 2025
What do you need to pack for a cruise? When it comes to this upcoming cruise from tour and travel company Bare Necessities, the answer appears to be very little.