Gosh Darn CPP & EI!
Given we start a new year, all we folks who receive pay cheques (I believe the Japanese term is Salary-man), we get to start paying CPP and EI premiums again. For a lot of folks, they are just deductions that appear on every pay stub, but for folks who make over a certain amount, this deduction appears some time in the year, and after that, they get a “virtual raise” given they do not have to pay these deductions for the rest of the year.
Michael James is a lover of numbers (but not a numerologist luckily) and pointed out one day how easy it is to approximate how much someone makes, by when they stop paying EI premiums (and you’d be surprised how many people talk openly about the fact that they have stopped paying the premium (in fact I had just told Michael James that very fact)).
It’s actually a pretty simple game to play and well worth a couple of minutes time to create a little model to figure this thing out.
Meet Jack
Jack gets paid bi-weekly, and works as an employee of XYYZZ. He gets paid a regular salary (assume no bonuses and such), so if we list the month in which Jack tells us “I stopped paying EI premiums this month” we can then approximate how much Jack actually makes in salary. We know from the EI web site that your premium is 1.73% of your insurable earnings (and the maximum insurable earnings is $42,300 in 2010).
| EI Premium | 1.73% | |
| Employee Max Contrib | $747.36 | |
| Month | Effective Weeks | Approx Gross Income |
| January | 2 | $561,600.00 |
| February | 4 | $280,800.00 |
| March | 6 | $187,200.00 |
| April | 8 | $140,400.00 |
| May | 11 | $102,109.09 |
| June | 13 | $86,400.00 |
| July | 15 | $74,880.00 |
| August | 17 | $66,070.59 |
| September | 19 | $59,115.79 |
| October | 22 | $51,054.55 |
| November | 24 | $46,800.00 |
| December | 26 | $43,200.00 |
Just remember what you tell folks can sometimes have more meaning than you might think.
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January 7th, 2010 at 10:18 AM
One more raise and I might have an EI-free paycheque at the end of the year. Woot.
You and I apparently have different definitions of what’s “worth the time.” I figure it’s only worth knowing how much your coworkers make if you have comparable responsibility, education and experience. That way you can decide how big of a raise you deserve. For random people, I really don’t care.
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January 7th, 2010 at 10:29 AM
It’s been a while since I tried to figure out someone’s salary this way, but I remember it being quite accurate. Nice post.
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January 7th, 2010 at 10:34 AM
How noble a view of your workplace. I always like the reaction folks have when you tell them you have figured out how much they make, it’s more fun as a tool of “Mayhem and Confusion”.
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January 7th, 2010 at 10:09 PM
[...] Big Cajun Man explains why your paycheck might have just dropped with the New Year. [...]
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January 6th, 2011 at 1:55 PM
Sweet. Now I know when I should be free of this tax.
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