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Stopping CPP ( /320 ) deduction for an employee

Dear Experts, employess in Canada need to have CPP deductions stopped on reaching a certain age. How can this be set up?

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  • Best Answer
    Posted on Sep 02, 2013 at 11:29 AM

    Hello Sikdar,

    Payroll stop calculating CPP automatically after reaching 70 yrs based on the date of birth maintained in Infotype 0002. If you want to stop at 65 yrs to 70 yrs then you need to maintain in Infotype 464. For more information you can refer note 1630315 - CPP:Changes to CPP calculation effective 01.01.2012

    With Regards,

    S.Karthik

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  • Posted on Sep 03, 2013 at 04:40 PM

    Asmentioned by S. Karthik, Note 1630315 relates to the latest changes to the contribution rules and came into effect in January 2012, and an important part is the creation of a new Tax Indicator "T" for IT0164.

    Note that other Tax Indicators should already exist in your system, such as D (Receiving Disability Pension), E (Exonorated, other reason), I (Irregular Formula Method), etc.

    So, to reply to your query, the Birthdate on IT0002 will stop CPP deductions if the employee is too young (before 18 years old) or too old (after 70 years old), but you can also stop it through a special Tax Indicator on IT0464.

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