Employers' costs for Canada Pension Plan contributions, Employment Insurance premiums and other benefits may be affected by:

• A. Change to wage rates
• B. Overtime premiums
• C. Allowance
• D. All of the above

Answer: (D)

The main idea is that CPP contributions, EI premiums, and many other employer benefits are calculated from the earnings that are considered insurable or pensionable, up to annual limits. Any change that increases those earnings will raise the base on which the rates apply, so the employer’s cost goes up. Increasing wage rates directly raises regular pay, and overtime premiums boost pay for extra hours; both expand the earnings base used for CPP and EI, increasing employer contributions. Allowances can also affect the earnings base—cash allowances that count as part of regular pay typically increase insurable/pensionable earnings and thus raise costs, though some allowances may be treated differently depending on their nature. Because wage level changes, overtime, and allowances can all modify the earnings used to calculate CPP, EI, and related benefits, they can all affect employer costs.