When and how can you stop contributing to Canada Pension Plan (CPP)?
CPP provides contributors with partial replacement of earnings (pension) during retirement. If you have contributed to CPP, you are eligible to begin receiving CPP after you turn 60. If you are earning employment income, you must continue to contribute to CPP until the age of 70 unless you file an election to stop contributing to CPP.
To file an election to stop contributing to CPP you must meet the following criteria:
- You are between the ages of 65-70
- You are receiving CPP retirement pension
- You are making CPP contributions and would like to stop
If you meet this criteria, you can fill out a CPT30 form to elect to stop contributing to CPP. You must file the form with your employer and send a copy to Canada Revenue Agency (CRA). You can stop contributing to CPP the first day of the month after the date you give this form to your employer and send a copy to CRA. Your election is effective until you revoke it.
It is common for a company to receive a PIER report (payroll desk audit) on the T4 for the calendar year in which the election was made. CRA will want to confirm that the correct CPP contributions were made prior to the election being in effect.
You can also file a CPT30 to elect to revoke your previous election and restart contributing to CPP. However, you can only file a CPT30 form once in a calendar year. For example, if you turn 65 in January and file the election to stop contributing to CPP and then later change your mind, you will need to wait until the next calendar year to file a new CPT30 form to revoke your election and begin contributing to CPP again.
Dawn Loeffler, BA (Hons), CPA, CA
Manager, Gilmour Group CPA’s
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