Canada Pension Plan contributions must be calculated manually when:

• A. When the employee earns more per pay period
• B. When there are 27 bi-weekly or 53 pay periods in the year
• C. Both A and B
• D. Neither A nor B

Answer: (C)

CPP contributions are based on pensionable earnings up to the yearly YMPE (the annual maximum), and the typical payroll setup prorates this automatically across standard pay periods. But when the year doesn’t fit neatly into a fixed number of pay periods or when earnings per period vary, you can’t rely on a simple per-period prorating. If there are more than the usual number of pay periods in the year (such as 27 bi-weekly or 53 weekly), the YMPE needs to be allocated across irregular periods to avoid over- or under-contributing. Likewise, if an employee earns more in a given pay period (for example, overtime or a higher base wage), that period’s CPP contribution must be calculated with the actual pensionable earnings up to YMPE, rather than assuming a fixed amount. In both situations, manual calculation ensures contributions stay accurate relative to the annual YMPE.

Thus, both scenarios can require manual CPP calculation to maintain correct year-to-date contributions.