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Normandin Beaudry

2016 Social Security Programs Parameters

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NB Bulletin Vol. 19 N. 1, January 2016

As in previous years, we inform you about the parameters that will be used by the major social security programs in 2016.

Quebec Pension Plan and Canada Pension Plan

YMPE
The Year’s Maximum Pensionable Earnings (YMPE) for2016 is $54,900, an increase of 2.4% over the 2015 YMPE of $53,600. The basic exemption remains at the current level of $3,500, which is the level applicable since January 1st, 1998.

Annual Contribution
Employee and employer contribution rates for the Quebec Pension Plan increase from 5.250% to 5.325% of contributory earnings in 2016, for an annual maximum contribution of $2,737.05. For the Canada Pension Plan, the employee and employer contribution rates remain at 4.950% of contributory earnings in 2016, for an annual maximum contribution of $2,544.30.

Monthly Pension
The maximum monthly retirement pension at age 65 for the Quebec Pension Plan and the Canada Pension Plan is set at $1,092.50 for 2016, based on the average YMPE over the last five years.

Employment Insurance

The Employment Insurance premium rate for employees in Quebec decreases by $0.02 per $100 of insurable employee earnings effective January 1st, 2016. The premium rate for employees in Quebec therefore decreases from $1.54 to $1.52. As for employers, they continue to contribute 1.4 times the employee rate so their premium rate will move down from approximately $2.16 to $2.13. These rates consider the Quebec Parental Insurance Plan (QPIP) in place since January 1st, 2006.

The Employment Insurance premium rate for employees outside Quebec remains at $1.88 per $100 of insurable employee earnings for 2016 and the employers continue to contribute 1.4 times the employee rate, for a premium rate of approximately $2.63 per $100 of insurable employee earnings.

The maximum insurable earnings increases from $49,500 to $50,800 for 2016.

Employer contributions can be further reduced for those offering a salary continuation program (SCP) registered with the Employment Insurance Commission. There are four types of SCPs each offering a unique Employment Insurance premium rate reduction:

Type 1: SCP based on the accumulation of paid sick days of at least one day per month and a maximum of at least 75 days.

Type 2: SCP based on the accumulation of paid sick days of at least one day and 2/3 per month and a maximum of at least 125 days.

Type 3: SCP providing a weekly indemnity1 for at least 15 weeks.

Type 4: SCP providing a weekly indemnity1 for at least 52 weeks (this reduction is only available to employers of public and para-public sectors).

Employer Premium Rates as of January 1st, 2016 (1)
(1) Per $100 of insurable employee earnings.
(2) The reduced premium rates are applicable for one complete year. In the event a plan is registered during the year, the adjustment is prorated according to the date of registration. 
(3) For Quebec employers whose employees all work in Quebec.
(4) Premium factor to be applied to the employee premium rate of $1.52 per $100 of insurable employee earnings for Quebec and of $1.88 per $100 of insurable employee earnings for other provinces.
(5) The premium factor is calculated from the unrounded rates of reduction.

Quebec Parental Insurance Plan (QPIP)

The QPIP contribution rates have decreased in 2016, moving down from 0.559% to 0.548% for employees, from 0.782% to 0.767% for employers and from 0.993% to 0.973% for self-employed workers. The maximum insurable income increases from $70,000 to $71,500 for 2016.

Health Services Fund Contribution

The current contribution rate remains unchanged for 2016. This rate is set at 4.26% of total payroll for certain public sector employers and for companies with a total payroll of more than $5 million. For companies with a total payroll of less than $1 million, the rate is set at 2.70% of total payroll. For companies which have a total payroll of more than $1 million but less than $5 million, the rate is a function of total payroll and ranges from 2.70% to 4.26% of total payroll according to the following formula:

Note that some employers of the primary sector and the manufacturing sector are now eligible to a reduced contribution rate.

Commission des normes, de l'équité, de la santé et de la sécurité du travail

The current contribution rate remains unchanged for 2016, and is set at 0.08% of insurable earnings. The maximum insurable earnings subject to contribution increases from $70,000 to $71,500 for 2016.

In Quebec, the minimum hourly wage is currently at $10.55.


Download the
Summary of the premiums and tax
related to public health insurance plans for all Canadian provinces and territories
 


1The SCP weekly indemnity must be at least equal to the benefits provided by the Employment Insurance.