The CRA has some changes in store for us this coming year.
As of January 2012, the maximum CPP pension for 2012 will be $986.67 per month. This figure is derived from the average of maximum pensionable earnings for last five years x 25% / 12 months. These figures generate a premium increase which, at the highest level, reaches $2306.70 or $192.23 per month. Both the employer and employee must contribute; proprietors will pay $384.45 per month or, when their contributory earnings reach $50,100, $4613.40 per month.
The basic exemption amount remains unchanged at $3,500, as it has not been indexed to inflation for several years. This means that premiums have actually increased by four per cent. Meanwhile the expected rate of CPI inflation for 2012 has just been announced as well: two per cent. That is quite a hike.