Beginning in 2024, Revenue Canada is instituting a new tier for Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions that apply to pensionable employee earnings that are above the current wage ceiling and below a new, higher ceiling. Revenue Canada refers to these calculations as second CPP and second QPP.

Sage 100 Contractor version 25.3.72.0 and later added new payroll Tax Types to accommodate employee contributions and employer portions of Second CPP or Second QPP. The following new Tax Types are available in the 5-3-1 Payroll Calculations window:

• Employee Second CPP Contributions
• Employer Second CPP Contributions
• Employee Second QPP Contributions
• Employer Second QPP Contributions

For more information about these tax changes, visit the Canada Revenue Agency

Second CPP (or QPP) ceiling

The maximum pensionable earnings under the first earnings ceiling is $68,500. Employer and employee contributions are calculated at 5.95% of earnings up to this amount (less the basic exemption).

The maximum pensionable earnings for the second earnings ceiling is $73,200. Employer and employee contributions on earnings between $68,500 and this second ceiling are calculated at 4.0%.

Default amounts and rates are filled in automatically when you select a Second CPP Tax Type in the 5-3-1 Payroll Calculations window.

Contributions are not permitted on pensionable earnings above $73,200.

Updating employee records for Second CPP and Second QPP

You need to create new payroll calculations for the Second CPP and Second QPP (as applicable), and then update all employee records with these calculations.

  NOTE: You need to have existing CPP calculations for employee and employer contributions before you can add calculations for the Second CPP. 

To add the Second CPP and Second QPP payroll calculations:

1. Open the 5-3-1 Payroll Calculations window.
2. In the data control box, enter the number to identify the new calculation.
3. In the Description box, enter a brief description for the calculation, such as Employee 2nd CPP.
4. In the Tax Type list, depending on whether you are setting up an employee or employer calculation for CPP or QPP, select one of the following tax types:
   • 20 - Employee Second CPP Contributions
   • 21 - Employer Second CPP Contributions
   • 22 - Employee Second QPP Contributions
   • 23 - Employer Second QPP Contributions
5. When you tab out of the field, Sage 100 Contractor will automatically select the corresponding Calculation Type, Calculation Method, Max Type, and Subject To fields. It also inserts the Default Rate and Default Max from the current tax tables.
6. Specify the accounts that will be affected by this payroll calculation:
   1. In the Credit Account box, enter the liability account number to credit.
   2. In the Credit Subaccount box, enter the ledger subaccount number to credit, if applicable.
7. From the Options menu, select Update Employees, Update Default Rate and Maximum, ALL Employees
8. This command saves the new calculation and updates all employee records.
9. Repeat steps 2 through 6 to add other employer and employee CPP and QPP calculations, as needed.

Report changes

The amount of the employee's contributions for the second CPP or QPP will be reported separately in Box 16A (for CPP2) or Box 17A (for QPP2) on T4 slips.

CANADIAN: Quebec indexation rate has changed