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John Legglet is 42 years old, earns $4000 per week, and is paid semi-monthly in the Province of Ontario. How much is his CPP deduction?

A. $62.50
B. $125.00
C. $250.00
D. $500.00

Answer :

Final answer:

To calculate John Legglet's CPP deduction, we need to calculate his annual salary and apply the CPP contribution rate. Based on his weekly salary of $4000 and semi-monthly pay, John's CPP deduction would be $109.09.

Explanation:

Since he earns $4000 per week and is paid semi-monthly, we can multiply his weekly earnings by 52 weeks and divide it by the number of pay periods in a year to get his annual salary.

In this case, John's annual salary would be $4000 * 52 / 24 = $8666.67.

The maximum CPP contribution rate for 2021 is 5.45% of pensionable earnings up to the Yearly Maximum Pensionable Earnings (YMPE), which is $61,600 for 2021.

Therefore, the CPP deduction would be $8666.67 * 5.45% = $472.60.

However, since John's annual salary is below the YMPE, his CPP deduction would be

$472.60 * 4000 / 8666.67 = $218.18 per pay period.

Since he is paid semi-monthly, his CPP deduction would be $218.18 / 2 = $109.09.

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