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. When the employee earns more per pay period and there are 27 bi-weekly or 53 pay periods in the year
• D. When there are 26 bi-weekly periods in the year

Answer: (C)

Canada Pension Plan contributions are computed on pensionable earnings up to the YMPE at a fixed rate, with a single annual maximum. In normal situations the payroll system can handle withholding automatically across standard pay schedules, such as 26 bi-weekly periods or 52 weekly periods. When there are more pay periods than usual in a year (for example, 27 bi-weekly or 53 weekly) there is an extra period to allocate contributions to, which can complicate how the annual maximum is reached. If the employee also earns more per pay period, the likelihood increases that earnings will reach the YMPE earlier in the year and the extra period can distort the correct distribution of CPP contributions unless you adjust manually. Therefore, the combination of an unusual number of pay periods and higher earnings per period makes manual calculation necessary to ensure contributions accurately reflect the annual maximum and rate across all pay periods.