Question

An employer incurs a Canada Pension Plan expense equal to the sum of the CPP withheld from the wages of all its employees. This statement is:

a) True
b) False

Answer 1

The statement is false because employers are required to match their employees' CPP contributions, resulting in a Canada Pension Plan expense that is twice the amount withheld from employees' wages.

Step-by-step explanation:

The statement 'An employer incurs a Canada Pension Plan expense equal to the sum of the CPP withheld from the wages of all its employees' is false. Employers in Canada are actually required to match the CPP contributions made by their employees, meaning that the overall expense to the employer for CPP is essentially double the amount withheld from employees' wages. The CPP is a type of payroll tax and part of the social security network designed to provide retirement income to employed Canadians. Employers contribute an amount equal to the CPP deducted from their employees' paychecks to the Canada Pension Plan, which increases the total expense incurred by the employer beyond just the withheld amount.