The maximum contributions related to the Quebec Pension Plan (QPP), employment insurance and the Quebec Parental Insurance Plan (QPIP) will increase next year by approximately $725.
Thus, the payroll tax bill, which covers the employee subject to the maximum remuneration for the purposes of each of these public plans, will exceed the $11,000 mark, which bill must be paid by the employee and his employer.
In concrete terms, the increase in the said charges charged to employees and employers will be around 7%.
RRQ
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 worker is required to pay the 12.8% alone.
The 12.8% contribution includes the 10.8% contribution to the basic plan and the 2% contribution to the additional QPP plan.
In 2022, contributions are capped on a maximum contributory earnings for QPP purposes of $61,400.
This ceiling on contributory earnings will undoubtedly be raised in 2023 to $63,100, if we are to believe the federal counterpart of the QPP, the Canada Pension Plan (CPP), which has just released the data for 2023.
You should know that the federal CPP and the 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 contributions to the QPP will therefore increase next year by $524.60, to be divided kif-kif between the employee (+ $262.30) and the employer (+ $262.30).
Self-employed workers must pay the total amount of said contribution to the QPP.
THE QUEBEC “SUPERPRIME”
Although the contributory earnings are the same, the QPP is much more greedy than the CPP towards workers and employers who must contribute to bailing out the coffers of the said public plan.
In 2022, the maximum CPP contribution caps 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 charges us this year an additional annual premium of $552.60. And next year, this Quebec surcharge will increase to $567.90.
EMPLOYMENT INSURANCE
In 2023, Québec employees and employers will see their respective employment insurance contributions increase by 7.94%, compared to 5.2% for workers and employers in the other provinces.
This (penalizing) gap of 2.7 percentage points is no doubt attributable to the fact that Quebec stands apart with its Parental Insurance Plan, whereas elsewhere in the country, employment insurance covers parental benefits and of maternity.
That said, the maximum annual contribution to employment insurance for Quebec employees will reach $781.05 next year, up $57.45 from this year.
On the employer side, who must pay 1.4 times the amount of the contribution charged to the employee, the maximum annual contribution will increase in 2023 to $1,093.47, or $80.43 more than this year.
In total, therefore, the maximum contribution to employment insurance will increase by $137.88 next year.
PARENTAL INSURANCE
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 the purposes of the QPIP.
In 2022, this maximum insurable salary under the QPIP is $88,000, an increase of $4,500 compared to the insurable salary for 2021, which was, for its part, an increase of $5,000 compared to that of 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 around $26 for the employee and $36 for the employer. It’s not a lot, you might say, but it comes on top of the other increases in social security contributions.