The Canada Pension Plan (CPP) offers contributors and their families’ partial replacement of earnings in the case of retirement, disability or death.
Almost anyone who works in Canada outside Quebec contributes to the CPP. In Quebec, the Quebec Pension Plan (QPP) provides similar benefits. So, if you go to work in Canada, you’ll typically be required to contribute 4.95 percent of your gross pay in CPP for each pay period.
You will see your CPP or QPP contributions in boxes 16 and 17 on your T4 Statement of Remuneration payslip.
Can I claim a tax refund on overpaid CPP contributions?
Yes, in some cases if you’ve overpaid CPP contributions during the tax year, then you’ll receive the overpaid amount back when you apply for your tax refund.
So for example, if you weren’t a resident of Quebec on December 31, 2018 and you contributed more to the Canada Pension Plan (CPP) than you had to, you can claim the difference on your tax return. If you were a resident of Quebec on December 31, 2018, then you can claim the excess amount on your provincial income tax return for Quebec.
When filing your tax return, if you were a resident of a province other than Quebec on December 31, 2018, and contributed only to the CPP, don’t claim more than $2,564.10 on line 308.
However if you contributed more, then claim the overpayment on line 448 of your return. The CRA will refund this overpayment or use it to reduce any balance you owe.
If you were a resident of Quebec on December 31, 2018 and contributed only to the QPP, do not claim more than $2,797.20 on line 308. If you contributed more, claim the overpayment on your provincial income tax return for Quebec.
You can’t deduct the total amount of CPP paid in Canada during your working holiday, but you can apply for and receive a full CPP retirement pension at age 65 or receive it as early as age 60 with a reduction, or as late as age 70 with an increase.
If you are unsure whether you overpaid Canada Pension Plan or not, you can apply for a free, no obligations refund estimate with Taxback.com.
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