Presentation on theme: "Worksheet 17 Deductions – EI and CPP. Deductions Gross Pay is what you’ve been calculating so far (pay before deductions) Deductions are things that are."— Presentation transcript:
Deductions Gross Pay is what you’ve been calculating so far (pay before deductions) Deductions are things that are taken off your pay before it is given to you (EI, CPP, taxes, union dues, etc) Net pay is your “take home pay” – how much your pay check is actually for
Employment Insurance EI stands for Employment Insurance The government takes some money from each pay check and if you lose your job, you can apply to get EI (money to live on while you look for another job)
Employment Insurance To apply for EI, you have to provide proof that you paid into EI, and worked a certain number of required hours You receive 55% of your average insured earnings, up to $447 per week. You cannot earn EI if you quit, were fired for misconduct (not doing your job properly) or didn’t work the minimum hours to qualify
EI Deductions As of 2009, 1.73% of your gross pay will be deducted for EI premiums –1.73% = 0.0173 So, if you had a gross pay of $500, you will pay 0.0173 x $500 = $8.65 for EI Your textbook was published a while ago, so the EI rate was different!
Canada Pension Plan CPP stands for the Canada Pension Plan Money is deducted from each pay check and saved for when you turn 65 and retire and is paid out until you die Each month, CPP will pay a person about 25% of their average earnings while they were paying CPP
Canada Pension Plan 4.95% of your gross pay will be deducted for CPP –4.95% = 0.0495 So if your gross pay for a week is $500, you will pay 0.0495 x $500 = $24.74 in CPP deductions
Canada Pension Plan As of 2008, the maximum CPP monthly payment was $884.58 You can apply to start your CPP as early as age 60 Can be used for “survivor’s benefits” if someone getting paid CPP passes away
Exemptions and Maximums For CPP, you are allowed a basic personal exemption This is a certain amount of money that you do not have to pay CPP premiums on For both EI and CPP, there is a maximum amount that can be deducted per year
Did you know…? Your employer ALSO pays EI and CPP premiums for you!