Free money? Here's why Canadians could see bigger paycheques in the next couple of months

Notice your paycheque getting a little bigger recently? Don’t worry, it’s likely not a mistake, and there’s a simple explanation.

According to the Government of Canada, many Canadians will notice their take-home pay increasing in the few months leading up to the end of the year.

It’s all because we pay into the Canada Pension Plan or the Quebec Pension Plan and Unemployment Insurance (EI) contributions throughout the year, and at some point, we reach our maximum contributions for the year.

When will you reach your maximum contributions?

Burdun Iliya/Shutterstock

According to the feds, it varies from person to person, and the biggest factor is how much you earn.

On average, many people will notice the change between July and December of each year after they have maxed out and in turn, there will no longer be any CPP/QPP or EI deductions for the remainder of the year.

CPP contribution rates/Government of Canada

According to Money Coaches Canada, “For 2023 the ‘maximum annual pensionable earnings’ is $66,600.00, less a basic exemption of $3,500. The CPP contribution rate for 2023 is 5.95% or a maximum of $3,754.45.”