Financial

The Canada Customs and Revenue Agency (formerly Revenue Canada) has announced that the maximum pensionable earnings under the Canada Pension Plan (CPP) for the year 2001 will be $38,300, a $700 increase over year 2000.

Contributors who earn more than the $38,300 ceiling on pensionable earnings in the year 2001 are not required or allowed to contribute more to the CPP.

The new ceiling was calculated according to a CPP formula that takes into account the changes in average weekly wages and salaries in Canada.

The year’s basic exemption for 2001 stays at $3,500.

Individuals who earn less than that amount do not need to contribute to the CPP.

Employee and employer contribution rates for the year 2001 will increase to 4.3% from 3.9% and the self-employed contribution rate will rise to 8.6% form 7.8% as provided in legislation.

The maximum employee contribution to the plan will be $1,496.40 and the maximum self-employed contribution will be $2,992.80.

Viewers should consult with a professional financial planner to make their best decisions in light of the changes.

-30-