One of the joys of the new year is the restart of having to pay CPP and EI premiums. It always makes that first pay cheque a bit smaller, and thus that much more annoying. You have just got used to not having to pay them (if you make enough money), and now you are back paying them again, how annoying!
The maximum CPP for 2014 is $2425.50 , that is the easy one.
For EI Premiums there are two possibilities:
- If you live in Quebec your Max EI premium is $767.88
- If you don’t live in Quebec your Max EI premium is $937.98
Some folks will pay CPP & EI premiums the whole year, but those who make a bit more, you will eventually hit the max and will stop paying premiums later in the year.
Remember you can have some Fun With Numbers and figure out when you may stop paying these premiums by doing this simple calculation (you’ll need your first pay cheque showing how much you pay each pay cheque):
# Pays = Maximum Premium / Premium per Pay
I do that every year and then mark my calendar to remind myself when I stop paying. On that pay you could take that “extra” money and then pay off debts with it, couldn’t you?
$4,851 for us self-employed folk!!
Yikes!!! Luckily the government supports our entrepreneurs in other ways, by forcing you to pay CPP as well, and tax you highly… no wait, that doesn’t sound good either…
I made the same comment about bonuses last year, deja vu!
Hmm, http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/hstrc-eng.html says the 2014 EI maximum is $913.
I agree, January can be a killer with renewed CPP and EI deductions. And if you are like me and get paid twice a month, it’s the second 31 day months in a row. Back when I had bi-weekly mortgage payments, it often meant 3 mortgage payments somewhere in there along with Christmas bills.
My company has annual performance bonuses that are handed out in March, which throw a wrench in your formula. As with taxes, a certain percentage is deducted for CPP and UI until the max is paid. If I got a $50,000 bonus (I can dream, can’t I), the remainder of my CPP and UI would be deducted on just that one pay.
I saw that, but either way, it’s close 🙂