Question

Alan is the director of your corporation. He is a resident of Alberta. He does not receive remuneration as an employee. You pay him a directors' fee of $6,050 every three months. Alan has claimed the basic amount, claim code 1, on his TD1 federal and provincial forms. Use this information to answer questions 24-28. Use 2022 rates. What is Alan's CPP contribution amount? Question 6 Answer savedMarked out of 1.00 Flag question Question text Alan is the director of your corporation. He is a resident of Alberta. He does not receive remuneration as an employee. You pay him a directors' fee of $6,050 every three months. Alan has claimed the basic amount, claim code 1, on his TD1 federal and provincial forms. Use this information to answer questions 24-28. Use 2022 rates. What is his EI premium amount?

Answer 1

Alan is not required to pay Employment Insurance (EI) premiums on his director's fees, as they are not considered insurable employment. He is only subject to the Canada Pension Plan (CPP) contributions, which can be calculated based on the annual exemption and contribution rate for the year.

Step-by-step explanation:

As a director of a corporation who resides in Alberta and receives a director's fee of $6,050 every three months, Alan is subject to the Canada Pension Plan (CPP) contributions but not Employment Insurance (EI) premiums. Directors' fees are considered pensionable earnings for CPP, but EI premiums are generally only deducted from insurable employment, which does not typically include director's fees. Therefore, Alan's CPP contribution amount can be calculated, but he would not have an EI premium amount to be calculated. The calculation of the CPP would consider the annual exemption amount and the rate for the contribution year.