Small white piggy bank sitting on a layer of Canadian twenties bills with a dollar coin (loonie) dropping inside.
© Sorin Alb / 123RF Stock Photo

The Canada Revenue Agency (CRA) has announced that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2021 will be $61,600 — up from $58,700 in 2020.

Contributors who earn more than $61,600 in 2021 are not required or permitted to make additional CPP contributions. The basic exemption amount for 2021 remains at $3,500, according to a release from the CRA.

The RRSP dollar limit, which is also indexed, will be $27,830 for 2021 — up from $27,230 in 2020.

The TFSA limit for 2021 will be officially announced later this year.

The employee and employer CPP contribution rates for 2021 will be 5.45%, up from 5.25% in 2020, and the self-employed contribution rate will be 10.9%, up from 10.5% in 2020. The increase in contribution rates is part of the continued implementation of the CPP enhancement, which began in 2019.

The maximum employer and employee contribution to CPP for 2021 will be $3,166.45 each and the maximum self-employed contribution will be $6,332.90. The maximums in 2020 were $2,898.00 and $5,796.00, respectively.