The maximum contributions related to the Quebec Pension Plan (QPP), employment insurance and the Quebec Parental Insurance Plan (QPIP) will increase next year by approx. $725.
Thus, the payroll tax bill covering the employee subject to the maximum remuneration associated with each of these public schemes will exceed $11,000, which bill will be paid by the employee and their employer.
Concretely, the increase in the mentioned fees for employees and employers will be around 7%.
In 2023, the QPP contribution rate will rise to 12.8% of eligible earnings, up 0.5 percentage points from this year. This contribution is shared 50-50 between the employee and the employer. The self-employed must pay the 12.8% alone.
The 12.8% contribution includes the 10.8% contribution to the basic scheme and the 2% contribution to the additional QPP plan.
In 2022, contributions are limited to a maximum contributory earnings for QPP purposes of $61,400.
This cap on contributory earnings will undoubtedly be raised in 2023 to $63,100, if the federal counterpart to the QPP, the Canada Pension Plan (CPP), is to be believed, which has just released data for 2023.
You should know that the federal CPP and Quebec QPP offer similar benefits to retirees and other beneficiaries.
In 2022, the maximum QPP contribution for employees and employers is $3,761.10 each, for a total of $7,552.20.
In 2023, the maximum QPP contribution for employees and employers will increase to $4038.40, for a total of $8076.80.
Our maximum contribution to the QPP will therefore increase next year by $524.60, to be split equally between the employee (+ $262.30) and the employer (+ $262.30).
Self-employed workers must pay the total amount of said contribution to the QPP.
QUEBEC “SUPER PRIME”
Although the contributory earnings are the same, the QPP is much more greedy than the CPP towards workers and employers who have to contribute to save the coffers of the said public plan.
In 2022, the maximum CPP contribution is capped at $3499.80 for both employee and employer, for a total of $6999.60.
Next year (2023), this maximum CPP contribution will increase to $3754.45 for employees and employers, or $7508.90 in total.
Compared to the federal CPP, which, I repeat, offers the same benefits, the QPP this year is charging us an additional annual premium of $552.60. And next year, this Quebec surcharge will increase to $567.90.
By 2023, Québec employees and employers will see their respective labor insurance contributions increase by 7.94% compared to 5.2% for workers and employers in the other provinces.
This (punitive) difference of 2.7 percentage points can no doubt be attributed to the fact that Quebec stands out with its parental insurance plan, whereas employment insurance elsewhere in the country covers parental benefits and maternity.
That said, the maximum annual employment insurance contribution for Quebec employees will reach $781.05 next year, an increase of $57.45 from this year.
On the employer side, which must pay 1.4 times the contribution imposed on the employee, the maximum annual contribution will increase in 2023 to $1,093.47, or $80.43 more than this year.
In total, the maximum contribution to employment insurance will therefore increase by $137.88 next year.
Premium rates for the Quebec Parental Insurance Plan (QPIP) will remain the same as this year. But workers and employers should still expect an increase in the maximum annual contributions, which in 2022 will be $434.72 for the employee and $608.96 for the employer.
Why ? Because from one year to the next, the Quebec government raises the maximum insurable earnings for QPIP purposes.
In 2022, this maximum insurable earnings under the QPIP is $88,000, an increase of $4,500 compared to the insurable earnings for 2021, which in turn was an increase of $5,000 compared to 2020.
In 2021 and 2022, the maximum QPIP premiums have increased by 6.37% and 5.39% respectively.
If the trend continues, the increase could reach 6%, or even about $26 for the employee and $36 for the employer. It’s not much, you might say, but it comes on top of the other increases in social contributions.