Question

Dean retired from Walmart Canada, at age 60, after 28 years of service and receives a monthly pension of $1,600.00 from his employer’s registered pension plan. Walmart asked Ben to return to work as a security guard for their warehouse. Ben receives $2,000.00 a month for this work. How much CPP he will pay based on 2023 rules? Suppose no CPT 30 form was filed to CRA and he has not max out for CPP yet.

Answer 1

Ben will pay CPP contributions based on his employment income as a security guard at Walmart. The contribution rate is 5.45% on income up to the annual maximum pensionable earnings. Ben's annual income is $24,000, so he would pay CPP contributions of $1,308 annually.

Step-by-step explanation:

Based on the 2023 rules for CPP (Canada Pension Plan), Ben will pay CPP contributions on his employment income as a security guard for Walmart. The CPP contribution rate for employees is 5.45% on employment income up to the annual maximum pensionable earnings (YMPE). The YMPE for 2023 is projected to be $63,500. Assuming Ben's monthly income as a security guard is $2,000, his annual income would be $24,000. He would pay CPP contributions on the first $24,000 of his income, which would be $24,000 * 5.45% = $1,308 annually.