Payroll: Why your net pay is lower in January
One of the top questions Payroll gets asked at the beginning of each year is: Why is my net pay lower in January?
Each calendar year, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums must be deducted from earnings until a maximum level is achieved. CPP and EI deductions start every January, which results in a reduced net pay.
As we approach the end of the year, Payroll has created a new page that explains how Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums affect employees' pay and the 2023 rates, set nationally by the Canada Revenue Agency for CPP, and the Canada Employment Insurance Commission for EI.