A number of Canadians are working well into their retirement. And, if you’re 65, or who employ someone who is 65, you need to be aware of a very specific rule. Although this rule was changed in 2012, we still find clients who are caught off guard by it.
Up until 2012, once you turned 65 your employer would automatically stop collecting and remitting the Canada Pension Plan premium from your pay. In 2012 this all changed. Now if you’re between 65 and 70, and receiving CPP retirement pension payments, you have the choice to have your employer stop collecting CPP premium or continue to collect the premium and have your future CPP payment increased. An employee must now inform the employer that they would like to opt out of the CPP premium. For this to happen, the employee must provide the employer a completed CPT30 election form. The earliest this form can be completed is the month the employee turns 65 and is receiving CPP retirement pension payments.
This rule has surprised and confused many seniors and employers alike.
For more details: What are the rule changes to the CPP Contribution Rules?Tags: CPP, payroll