Paycheque deductions going up for employees; employers’ contributions also rising
Canadians’ paycheques will be a little lighter in 2014 with increases in employment insurance (EI) and Canadian Pension Plan (CPP) payments, says the Canadian Taxpayers’ Federation.
According to the federation, the maximum employee EI deduction will go up $23 next year to $914, while employers’ share of EI will go up $31 to $1,279, based on an average wage of $48,600.
The maximum employee CPP contribution is going up $70 to $2,426, for employees earning at least $52,500 a year.
“What we’re trying to call attention to is the government shrinking our paycheques by taking additional EI and CPP taxes even though the government was just bragging about freezing EI rates,” Gregory Thomas, the federation’s federal director, said Monday.
“But lo and behold, our paycheques get $23 skinnier next year despite the quote-unquote freeze on EI, and $70 skinnier from CPP. This is the tail-end of a fairly long-term trend to just kind of by stealth raise payroll taxes year in and year out.”
Others, though, say Canada Pension Plan payments should increase more. Several provincial finance ministers and union leaders have called for higher increases to plan contributions, because many younger workers face lower incomes and higher debts without private pension plans.
Current plan benefits amount to slightly more than $12,000, with the Guaranteed Income Supplement topping it up to $16,000.
The federal government is also introducing a new tax credit for first-time donors to a registered charity: 40 per cent of the first $200 donated, instead of 15 per cent. The credit for the amount more than $200 and up to $1,000 rises to 54 per cent from 29 per cent.