In relation to the Canada Pension Plan, the Canada Revenue Agency is responsible for which components?

• A. Yearly basic exemption
• B. All of the above
• C. Annual contribution rate
• D. Maximum pensionable earnings

Answer: (B)

Canada Revenue Agency handles the CPP contribution process through payroll remittances, using three key figures to determine how much must be contributed. First, the yearly basic exemption is the portion of earnings that isn’t subject to CPP contributions. Then the annual contribution rate is the percentage applied to pensionable earnings to calculate the actual contributions by the employee and employer. Finally, the maximum pensionable earnings set each year caps how much of a worker’s earnings can be subject to CPP contributions. The CPP program sets these parameters, but it’s the CRA that administers their application and collects the contributions. That’s why all three components fall under the CRA’s responsibility.