In this ancient tome, I wrote about if someone tells you, “I just stopped paying my CPP and EI premiums” you can from that infer how much they make yearly.
Let’s revisit that interesting bit of Arithmetic:
- In 2013 the CPP rate is 9.9% (note that in my original post it was only 4.6%, wow, that’s a jump) with a maximum pay out of $2,356.20 . (this is for folks that are not self-employed)
- The Employment Insurance is deducted at 1.88% with a maximum pay out of $891.12
- Assuming someone is paid biweekly (but you can do this for other payment methods too).
You are going to estimate a yearly income of $X , and since this is June, let’s say your friend says, “Yes, I hit my max this week (and this week is June 16th, or the 25th week of 2013), so this is their 12th pay cheque
(( X / 25.5 ) * 4.5% ) * 12 = 2356.20
Dividing X by 25.5 is about the bi-weekly income numbers. From this equation you can do a little fun equation manipulation to get:
X = ( (2356.20/12) * 25.5) /0.045
X = $ 111,265 per annum
What if it was next pay where they maxed out
X = ( (2356.20/13) * 25.5 ) / 0.0.45
X = $ 102,706 per annum
These are rough estimates, and your mileage may vary, but still fun.
Past CPP & EI
Yes, it is a topic I write about, as it is important to me. Here are a few from the past years, to compare and contrast (hint see how much CPP has gone up).