Tax Tables on the Internet
1. SPREADSHEET FOR MONTHLY PAYMENTS TO THE GOV’T DUE ON THE 15TH OF THE MONTH.
2. SPREADSHEET FOR BI-MONTHLY PAYMENTS TO THE GOV’T DUE ON THE 15TH AND THE 31ST OF THE MONTH.
3. SPREADSHEET FOR NANNY’S PAYMENTS
Canada Pension Plan Changes
The government has enacted several changes to the CPP. It is important to note at the outset that these changes will not affect anyone who is currently collecting the CPP retirement, disability or survivor benefits, or anyone who starts to collect their pensions prior to 2011. Note that there are different enactment dates after 2010, and the impact of the changes will depend on when you apply for benefits. We have summarized some of the significant changes to the CPP that may affect many of you in years to come.
Under the current system, if you receive a CPP pension and work, you will not pay contributions and as a result, you will not continue to build your CPP pension. Under the new system, if you are under age 65 and work while you receive a CPP retirement benefit, you and your employer will be required to make CPP contributions (which will effectively increase your CPP retirement benefit). This rule would be voluntary if you are age 65 and older, but employers of seniors opting to participate in the CPP would be required to also contribute. A senior 65 to 70 opting out to participate must sign a OPT 30 form in triplicate one for themselves , one copy for us and one copy for Revenue Canada.
Removal of Work Cessation Test
Under the current system, in order for you to qualify to collect the CPP retirement pension before you turn age 65 you must either reduce your earnings or stop work for at least two months. After this period, it is possible to work again. Under the new legislation, starting in 2012, this work cessation test will be removed. What this means is that you can start taking your benefit as early as age 60, without any work interruption. If you are planning to take your CPP benefit while continuing to work, either on a full or part-time basis, you will benefit from this change. This may allow you to use your CPP pension to phase into retirement or supplement your earnings while you continue to work.
Increase in the General Low Earnings Drop Out
The CPP retirement pension amount is based on the number of years an individual has worked and contributed to CPP, as well as the salary or wages he or she has earned. In determining the average of earnings over the span of a career, adjustments are made to account for years where an individual’s earnings are low or even non-existent. Currently, this provision called the “general low earnings drop out rate” allows for 15% of the years where earnings are low or nil to be dropped from the calculation. This means that if you started your CPP at age 65, then almost seven years of low or zero earnings are removed from the determination of your average earnings.
Under the new legislation, the general low earnings drop out rate is increased to:
- 16% in 2012, allowing a maximum drop out of almost 7.5 years; and
- 17% in 2014, allowing a maximum drop out rate of 8 years.
This is welcome news to individuals that have had several work interruptions.