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Jan 5, 2024

CPP hikes present another challenge for small business

As of January 1, Canadians will be seeing a drop in their take-home income, while employers will face another increase to their payroll budgets due to Employment Insurance (EI) hikes and adding a second earnings limit to Canada Pension Plan (CPP) thereby hiking CPP, says the Canadian Federation of Independent Business (CFIB). These latest hikes increased payroll taxes for employers by up to $366 per employee, and up to $348 for workers. This year, total employer contributions for CPP and EI alone could amount to $5,524 per employee. 


Heading into 2024, most small businesses (77 percent) want governments to focus on addressing rising prices and the cost of doing business, while another 74 percent want governments to reduce the overall tax burden, says data from CFIB. If governments reduced the overall tax burden, over half (57 percent) of small businesses say they would increase employee compensation such as wages and benefits. 


CFIB is calling on Ottawa to work with the provinces to offset the CPP hikes, implement a 50:50 split in EI premiums between employers and employees, or introduce a refundable credit, similar to the 2015-16 Small Business Job Credit, to offset the rate increases for small businesses. 

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