Changes made to the Canadian Pension Plan (CPP) and Federal Employment Insurance (EI) have affected your salary.

As of January 1, 2024, the employment insurance premium rate rose from $1.63 to $1.66 per $100 for employees and from $2.28 to $2.32 per $100 for employers.

It is not only the EI premium rates that have increased this year.

Each year, employees pay EI premiums until they reach an income limit - known as the Maximum Insurable Earnings (MIE), and now, this number has also increased, rising from $61,500 to $63,200 in 2023, meaning the maximum annual EI contribution for employers has increased by $65.34 to $1,468.77 per employee.

Regarding CPP contributions, an annual ceiling of 5.95% must be paid, and the maximum contribution is now $3,867.50 - up from $3,754.45 in 2023.

According to the federal government, the maximum pensionable earnings under CPP this year is $68,500, up from $66,600 in 2023.

The Canadian Federation of Independent Business (CFIB) indicates that these changes mean an increase in payroll taxes for employers by $366 per employee, and total employer contributions to CPP and EI can reach $5,524 per employee this year.

Moreover, this does not take into account the business location, where an employer can pay between three to seven payroll taxes depending on
the location.

The CFIB spoke about
these changes last year.

Christina Santini, National Affairs Director at CFIB, said in a previous statement: "When the government raises payroll taxes, it increases the cost of labor, forcing many business owners to make tough decisions."

She added, "Some business owners may need to review wage and hiring plans, cut expenses, or raise prices of their products and services."

On January 4, CFIB confirmed that the changes put employees in a "more difficult position, especially when many employees are seeking raises at the start of the year."

According to a recent CFIB survey, most small businesses (77%) want governments to focus on addressing rising prices and business costs, and 74% want governments to work on reducing the tax burden."