Question

Stan used to work for ABC Rental Company in Toronto and had contributed the maximum allowable amount to the Canada Pension Plan (CPP) for the year. Later, Stan quit ABC and joined the Maple Leafs. What should the payroll staff do in this situation regarding Stan's CPP contributions?

Answer 1

The payroll staff at Maple Leafs should not deduct further CPP contributions from Stan since he has already reached his maximum contribution for the year with his previous employer.

Step-by-step explanation:

When an individual such as Stan switches jobs within a year, the new employer's payroll staff at the Maple Leafs should take into consideration the amount of CPP contributions already made by Stan at his previous job. Since Stan has already contributed the maximum allowable amount to the Canada Pension Plan for the year while working for ABC Rental Company, the payroll staff at Maple Leafs should not deduct any more CPP contributions for the remainder of the year. If contributions are continued erroneously, Stan would be eligible for a refund when he files his income tax for the year. It's critical for payroll departments to ensure accuracy in CPP deductions to avoid over-contributions.