Contribution rates increase in 2012
December 21, 2011
What are the new rates?
You will contribute an additional 1.1% of your salary to the Teachers' pension plan. The increase will be phased in over three years: 0.4% more in 2012, and 0.35% in each of 2013 and 2014. All increases go into effect with your first pay in January.
|Year||Up to CPP limit||Above CPP limit||Increase*|
|* As a percentage of salary|
What's the CPP limit?
The CPP limit is the maximum earnings on which CPP contributions and benefits are based. The limit, set annually by the Canada Revenue Agency, is $50,100 in 2012.
Contributions to the Teachers' pension plan are therefore based on two amounts: contributions are lower on salary up to the Canada Pension Plan (CPP) a contributions and benefits limit, and higher on any salary above the CPP limit.
What's the bottom line?
For an average teacher earning $80,000, the 0.4% increase means an extra $320 in contributions in 2012. This will be partially offset by lower taxes because pension contributions are tax deductible.