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Normandin Beaudry

2018 Social Security Programs Parameters

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There, in black and white

NB Bulletin Vol. 21 No. 1, January 2018

As is our custom, we wish to inform you of the parameters that will be used by the major social security programs this year.

Quebec Pension Plan (QPP) and Canada Pension Plan (CPP)

YMPE

The Year’s Maximum Pensionable Earnings (YMPE) for 2018 is $55,900, an increase of 1.1% over the 2017 YMPE of $55,300. The basic exemption remains at the current level of $3,500, which is the level applicable since January 1, 1998.

Annual contribution

Employee and employer contribution rates for the Quebec Pension Plan remain at 5.400% of contributory earnings in 2018, for an annual maximum contribution of $2,829.60. For the Canada Pension Plan, the employee and employer contribution rates remain at 4.950% of contributory earnings in 2018, for an annual maximum contribution of $2,593.80.

Monthly pension

The maximum monthly retirement pension at age 65 for the Quebec Pension Plan and the Canada Pension Plan is set at $1,134.17 for 2018, based on the average YMPE over the last five years.

Employment Insurance

The Employment Insurance premium rate for employees in Quebec increases by $0.03 per $100 of insurable employee earnings effective January 1, 2018. The premium rate for employees in Quebec therefore increases from $1.27 to $1.30. As for employers, they continue to contribute 1.4 times the employee rate, with their premium rate moving up from approximately $1.778 to $1.820. These rates take into account the Quebec Parental Insurance Plan (QPIP), in place since January 1, 2006.

The Employment Insurance premium rate for employees outside Quebec also increases by $0.03 per $100 of insurable employee earnings effective January 1, 2018. The premium rate for employees outside Quebec therefore increases from $1.63 to $1.66. As for employers, they continue to contribute 1.4 times the employee rate, with their premium rate moving up from approximately $2.282 to $2.324 per $100 of insurable employee earnings.

The maximum insurable earnings increases from $51,300 to $51,700 for 2018.

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 the public and para-public sectors).

It is also important to note that the Employment Insurance two-week waiting period has been revised to one week effective January 1, 2017. Hence, to remain eligible for a reduced premium rate, employees must receive an income replacement in case of disability after a waiting period of at most one week. Organizations that have a two-week waiting period and that benefited from the reduced rate on December 31, 2016, must provide a maximum waiting period of one week. Organizations have until January 2, 2021 to comply with this new requirement in order to continue to benefit from the reduced rate. 

Quebec Parental Insurance Plan (QPIP)

The QPIP contribution rates remain unchanged in 2018, and are set at 0.548% for employees, 0.767% for employers and 0.973% for self-employed workers. The maximum insurable income increases from $72,500 to $74,000 for 2018.

Health Services Fund Contribution

For certain public-sector employers and companies with a total payroll of more than $5 million, the current contribution rate remains unchanged in 2018. This rate is set at 4.26% of total payroll. For companies with a total payroll of less than $1 million, the rate will decrease from 2.50% to 2.30% of total payroll in 2018. For companies that have a total payroll of more than $1 million but less than $5 million, the rate will also decrease in 2018 and is established according to the following formula:

Note that some employers of the primary and manufacturing sectors are eligible for a reduced contribution rate.

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

The current contribution rate will remain unchanged at 0.07% of insurable earnings in 2018. The maximum insurable earnings subject to contribution increases from $72,500 to $74,000 for 2018.

In Quebec, the minimum hourly wage is currently $11.25.

 

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


Download the
Summary of the premiums and tax related to public health insurance plans 
for all Canadian provinces and territories in 2018


 

Please feel free to contact us for additional information.

514.285.1122
 
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6