Annual benefits from the Canada Pension Plan will rise by as much as $4,500. To finance this expansion, Ottawa and provincial governments have decided to increase payroll taxes.
Workers and employers already pay up to $5,088 in CPP taxes each year. Rates will begin to gradually increase in 2019. By 2023, workers will fork out an extra $408 in payroll taxes. Businesses will pay the same amount, bringing the total tax up to $5,904.
Previous CPP tax increases were wisely offset by other tax relief so Canadian workers didn’t pay more. But that isn’t happening now.
The best way to help families save for retirement is by leaving more money in their pockets today.