When you switch out your calendar on January 1st, be sure to update your payroll calculations as well.
CPP and EI Rates for 2022
The deduction rate for the Canada Pension Plan moves up to 5.7% in 2022. The basic exemption remains $3,500, but the maximum pensionable earnings increase to $64,900 (resulting in a $3,499.80 maximum deduction). The matching provision for employers remains 1 to 1.
The deduction rate for Employment Insurance remains at 1.58%, but the maximum insurable earnings increase to $60,300 (resulting in a $952.74 maximum deduction). The matching provision for most employers (those that do not offer a short-term disability plan) remains at 1.4 to 1.
While self-employed individuals do not normally contribute to EI, they are responsible for both portions of CPP (a maximum deduction of $6,999.60). If you're operating your farm or business outside of a corporation, you need to plan accordingly, as this amount is payable on your T1 return.
Ontario & PEI Minimum Wage Increases
While you're updating your Source Deduction calculations, you might need to update your employees' wages as well. While the proposed provincial legislation has not yet passed, we expect the following minimum wage rates on January 1, 2022:
General rate of $15.00/hour
Student rate of $14.10/hour
Homeworker rate of $16.50/hour
Hunting/fishing guiding rate of $75.00/day if working less than 5 consecutive hours/day ($150.05/day thereafter)
The biggest proposed change in the legislation as it currently stands is the elimination of the lower minimum wage rate for liquor servers. Those employees will now be subject to the general rate of $15.00/hour.
These changes bring Ontario in line with the minimum wage for jobs that fall under federal jurisdiction, which is also set at $15.00/hour. The current general minimum wage for the other provinces and territories are as follows:
BC - $15.20/hour
AB - $15.00/hour
SK - $11.81/hour
MB - $11.95/hour
QC - $13.50/hour
NB - $11.75/hour
PE - $13.00/hour
NS - $12.95/hour
NL - $12.75/hour
YT - $15.20/hour
NT - $15.20/hour
NU - $16.00/hour