Transfer from Quebec to Ontario
Employees who transfer from Quebec, while working for the same employer under the same business entity, will require a reconciliation of QPP and CPP contributions. Employers must use the YTD QPP employee contributions when calculating any remaining CPP to be deducted.
The Canada Revenue Agency (CRA) has confirmed that Box 26 will be populated by pensionable earnings up to the YMPE, even if the employee has contributed at least $2,564.10 toward QPP before transferring outside of Quebec.
David earns an annual salary of $58,000 and is paid on a weekly basis. He earned $55,300 in Quebec and contributed $2,797.20 in QPP before transferring to Ontario. He then earned $1,115.38 in each of the two weeks left of the year as an Ontario employee. No CPP contributions are required since he has already contributed at least $2,797.20 in QPP. David’s Ontario T4 slip would be completed as follows:
- Box 16 of T4 = 0
- Box 26 = $0
QPP – EMPLOYEE TRANSFERING TO QUEBEC
For the 2017 tax reporting year if an employee is transferred to Quebec the employer must multiply the total CPP contributions withheld since the beginning of the year by a weighting factor to determine the maximum employee QPP contribution.
Payroll systems should have been programmed with the new weighting factor effective for the first pay period of 2017 to be ready in the event that an employee transfers from another jurisdiction to Quebec.
For the first pay period of 2017, the factor would be calculated as follows:
With a CPP contribution rate of 4.95%, the weighting factor would be 5.40 / 4.95 = 1.0909. (When the CPP and/or QPP contribution rate changes, the weighting factor would require a recalculation.)
Jacques earned $15,000 in Ontario and paid CPP contributions of $655.88 prior to moving to Quebec.
Jacques year to date contribution will be $655.88 x 1.0909 (Weighting Factor) = $715.50
Jacques will contribute $2,081.70 to QPP until he reaches a combined total of $2,797.20 between CPP and QPP.
An employee who has already contributed $2,564.10 in CPP contributions prior to moving to Quebec will not be required to contribute to the QPP as he attained the maximum for 2017.
Melanie earned $55,600 in Ontario and paid the maximum CPP contribution of $2,564.10 before moving to Quebec.
Melanie will not contribute to QPP as she reached the maximum yearly contribution for 2017.