Canada Pension Plan (R.S.C., 1985, c. C-8)

Contributory Self-Employed Earnings

Marginal note:Amount of contributory self-employed earnings

• 13 (1) The amount of the contributory self-employed earnings of a person for a year is the amount of the self-employed earnings except that,

  • (a) for a year in which the person reaches eighteen or seventy years of age, in which their contributory period ends under this Act or under a provincial pension plan by reason of disability or in which a disability pension ceases to be payable to them under this Act or under a provincial pension plan, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year

    • (i) after

      • (A) they reach eighteen years of age, or

      • (B) the disability pension ceases to be payable, or

    • (ii) before

      • (A) they reach seventy years of age, or

      • (B) the month following the month in which their contributory period ends under this Act or under a provincial pension plan by reason of disability,

    is of 12;

  • (b) despite paragraph (a), for a year in which a retirement pension is payable to them under this Act or under a provincial pension plan and for which they make an election to exclude self-employed earnings, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year before the election is deemed to be made — minus the number of months that are excluded from the contributory period under this Act or under a provincial pension plan by reason of disability — is of 12;

  • (c) despite paragraph (a), for a year in which a retirement pension is payable to them under this Act or under a provincial pension plan and for which they revoke an election to exclude self-employed earnings, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year after the election is deemed to be revoked — minus the number of months after they reach seventy years of age — is of 12;

  • (d) despite paragraph (a), for a year in which an election referred to in subparagraph 12(1)(c)(ii) is made, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year before the election is made — minus the number of months that are excluded from the contributory period under this Act or under a provincial pension plan by reason of disability — is of 12; and

  • (e) despite paragraph (a), for a year in which an election referred to in subparagraph 12(1)(c)(ii) is revoked, the amount of the contributory self-employed earnings is equal to that proportion of the amount of the self-employed earnings that the number of months in the year after the election is revoked — minus the number of months after they reach seventy years of age — is of 12.

• Marginal note:Election

  (1.1) An election referred to in paragraph (1)(b) or (c)

  • (a) shall be made or revoked in the prescribed form and manner;

  • (b) may be made only once for a year;

  • (c) may not be revoked for the year for which it is deemed to be made;

  • (d) may not be made for a year for which an election is revoked;

  • (e) is deemed to be made or revoked on the first day of the month referred to in the election or revocation, as the case may be; and

  • (f) may not be made for a year for which the person has income from pensionable employment.

• Marginal note:Condition

  (1.2) For the purposes of paragraph (1.1)(e), the month may not be

  • (a) before the one in which the person reaches sixty-five years of age;

  • (b) before the one in which the retirement pension becomes payable; or

  • (c) after the one in which they reach seventy years of age.

• Marginal note:Excluded earnings

  (2) Subject to subsection (1), the contributory self-employed earnings of a person do not include earnings for

  • (a) any period described in paragraph 12(1)(a), (b), (c) or (d); or

  • (b) any year that

    • (i) follows a year for which the person makes an election to exclude self-employed earnings, and

    • (ii) is not a year for which they revoke the election.

• Marginal note:Election to include certain earnings — base contribution

  (3) Despite subsection (1), the amount of the contributory self-employed earnings of a person for a year for the purposes of subsection 10(1) shall, if the person or their representative makes an election in the prescribed form and manner within one year from June 15 in the following year — or, in the case of an employee to whom the Minister refunds an amount under section 38, from the day on which the Minister refunds the amount — include any amount by which

  • (a) the lesser of

    • (i) his contributory salary and wages for the year, and

    • (ii) his maximum pensionable earnings for the year,

  exceeds

  • (b) the aggregate of

    • (i) the person’s salary and wages on which a base contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a base contribution has been made for the year by the person under a provincial pension plan, and

    • (ii) the lesser of

      • (A) the aggregate of all amounts deducted as prescribed on account of his basic exemption for the year by one or more employers pursuant to section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers pursuant to such a plan, and

      • (B) his basic exemption for the year.

• Marginal note:Earnings — first additional contribution

  (3.1) For 2019 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.1) shall include any amount by which

  • (a) the lesser of

    • (i) the person’s contributory salary and wages for the year, and

    • (ii) the person’s maximum pensionable earnings for the year,

  exceeds

  • (b) the aggregate of

    • (i) the person’s salary and wages on which a first additional contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan, and

    • (ii) the lesser of

      • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

      • (B) the person’s basic exemption for the year.

• Marginal note:Earnings — second additional contribution

  (3.2) For 2024 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.2) shall include any amount by which

  • (a) the lesser of

    • (i) the person’s contributory salary and wages for the year, and

    • (ii) the person’s additional maximum pensionable earnings for the year,

  exceeds

  • (b) the aggregate of

    • (i) the person’s salary and wages on which a first additional contribution has been made for the year and the person’s salary and wages on which a second additional contribution has been made for the year,

    • (i.1) the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan and the person’s salary and wages on which a second additional contribution has been made for the year by the person under a provincial pension plan,

    • (ii) the lesser of

      • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

      • (B) the person’s basic exemption for the year, and

    • (iii) the amount calculated under subsection (3) or (3.1), if any.

• Marginal note:Self-employed earnings where resident in province

  (4) A reference in this Act to the contributory self-employed earnings of a person for a year shall, in relation to any self-employed earnings of a person who was resident on the last day of the year in a province providing a comprehensive pension plan, be construed as a reference to his self-employed earnings for the year as such earnings are required to be computed under the provincial pension plan of that province.

Marginal note:Amount of self-employed earnings for a year

14 The amount of the self-employed earnings of a person for a year is the aggregate of

• (a) an amount equal to

  • (i) his income for the year from all businesses, other than a business more than fifty per cent of the gross revenue of which consisted of rent from land or buildings, carried on by him,

  minus

  • (ii) all losses sustained by him in the year in carrying on those businesses,

  as such income and losses are computed under the Income Tax Act, except any such income or losses from the performance of services described in paragraph 7(1)(d) that has been included in pensionable employment by a regulation made under subsection 7(1) or by a regulation made under a provincial pension plan,

• (b) his income for the year from employment described in paragraph 7(2)(e) that has been excepted from pensionable employment by a regulation made under subsection 7(2) or by a regulation made under a provincial pension plan, as that income is computed under the Income Tax Act, and

• (c) in the case of an Indian, as defined in the Indian Act, to the extent provided by regulations and subject to any conditions prescribed by those regulations, his income for the year from self-employment on a reserve, as defined in the Indian Act, that is not otherwise included in computing income for the purposes of the Income Tax Act.

Marginal note:Idem

14.1 For the purposes of paragraph 14(a), where a member of a family in a congregation is specified in an election under subsection 143(2) of the Income Tax Act for a year, such part of the total of all amounts allocated to the family under that subsection for the year as may reasonably be regarded as having been derived from a business carried on by the congregation shall be deemed to be the member’s income (as computed under that Act) from such a business carried on by the member.

Salary and Wages on which Contribution made

Marginal note:Amount of salary and wages on which base contribution made

• 15 (1) The amount of a person’s salary and wages on which a base contribution has been made for a year is the greater of the following amounts, divided by the contribution rate for employees for the year:

  • (a) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act, minus the portion of those amounts that exceeds the amount determined under paragraph 8(2)(a), and

  • (b) an amount equal to

    • (i) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act or under a provincial pension plan,

    minus

    • (ii) the sum of

      • (A) the amount determined under paragraph 8(2)(b), and

      • (B) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act or under a provincial pension plan, minus the sum of the amounts determined under paragraphs 8(2)(a) and (b).

• Marginal note:Employer’s failure to deduct amount

  (1.1) For the purposes of subsection (1), if an employer has failed to deduct an amount as required from the person’s remuneration on account of the employee’s base contribution for the year and that person has, before June 30 of the following year, notified the Minister of the employer’s failure to so deduct that amount, an amount equal to the amount that should have been so deducted by the employer on account of that contribution is added to the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year.

• Marginal note:Effect of payment by employer of amount not deducted as required

  (2) For the purposes of subsection 8(2) and this section, if an amount that an employer has failed to deduct as required from the remuneration of an employee on account of the employee’s base contribution for a year is paid by the employer on account of the employee’s base contribution for that year, the amount so paid is deemed to have been deducted by the employer on account of that contribution.

Marginal note:Amount of salary and wages on which first additional contribution made

• 15.1 (1) The amount of a person’s salary and wages on which a first additional contribution has been made for a year is the greater of the following amounts, divided by the first additional contribution rate for employees for the year:

  • (a) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act, minus the portion of those amounts that exceeds the amount determined under paragraph 8(2)(a.1), and

  • (b) an amount equal to

    • (i) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act or under a provincial pension plan,

    minus

    • (ii) the sum of

      • (A) the amount determined under paragraph 8(2)(c), and

      • (B) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act or under a provincial pension plan, minus the sum of the amounts determined under paragraphs 8(2)(a.1) and (c).

• Marginal note:Employer’s failure to deduct amount

  (1.1) For the purposes of subsection (1), if an employer has failed to deduct an amount as required from the person’s remuneration on account of the employee’s first additional contribution for the year and that person has, before June 30 of the following year, notified the Minister of the employer’s failure to so deduct that amount, an amount equal to the amount that should have been so deducted by the employer on account of that contribution is added to the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year.

• Marginal note:Effect of payment by employer of amount not deducted as required

  (2) For the purposes of subsection 8(2) and this section, if an amount that an employer has failed to deduct as required from the remuneration of an employee on account of the employee’s first additional contribution for a year is paid by the employer on account of the employee’s first additional contribution for that year, the amount so paid is deemed to have been deducted by the employer on account of that contribution.