2024 CPP and RRSP Updates: New Earnings Ceilings and Contribution Limits Revealed

What's new for January 1, 2024?

For the first time, a second earnings ceiling will be used to determine additional CPP contributions.

The maximum pensionable earnings under the Canada Pension Plan for 2024 will be $68,500, up from $66,600 in 2023, according to the Canada Revenue Agency.

And beginning next year, a second earnings ceiling of $73,200 will be used to determine additional CPP contributions (CPP2). As a result, earnings between $68,500 and $73,200 will subject to a second tranche of CPP contributions as part of the plan’s expansion that began in 2019.

The basic exemption amount for 2024 remains at $3,500.

CPP Contribution rate and amounts

Total employee and employer CPP contribution rates for 2024 remain at 11.90% (5.95% each) and the total maximum contribution will be $7,735.00 — up from $7,508.90 in 2023. Employee and employer CPP2 contribution rates for 2024 will be 8.00% (4.00% each) in 2024, and the maximum contribution will be $376.00.Contributors are not required or permitted to make contributions on pensionable earnings above $73,200.

RRSP & TFSA Limits

 The RRSP dollar limit, which is indexed, will be 18% of earned income you reported on your tax return in the previous year to a maximum of $32,490 for 2025 and $31,560 for 2024, up from $30,780 for 2023.

The TFSA limit for 2024, expected to be announced later this year, is expected to increase to $7,000 up from the current $6,500 for 2023. This would bring the cumulative total contribution limit to $95,000 for 2024.

Source: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax- tips-2023/maximum-pensionable-earnings-contributions-2024.html