Explained: Canada Pension Plan for working holidaymakers

Working Holiday in Canada CPP
  • ‘Do I have to pay it?’
  • ‘Can I claim a CPP refund?’
  • ‘How much will I be due?’

All of your questions answered!

The Canada Pension Plan (CPP) offers contributors and their families partial replacement of earnings in the case of retirement, disability or death.

Almost everyone who works in Canada (outside of Quebec – where the Quebec Pension Plan (QPP) provides similar benefits) contributes to the CPP.

Canadian workers are typically required to contribute 4.95% of gross pay in CPP for each pay period.

CPP deductions for Working holiday in Canada

How can I tell if I am contributing to CPP?

Easy. Check your pay slip!

You can see your CPP or QPP contributions in boxes 16 and 17 on your T4 Statement of Remuneration pay slip.

I do not intend to retire in Canada. Can I claim a CPP refund?

Yes, it is possible to claim a refund of CPP contributions under certain circumstances.

For instance, where you have overpaid CPP you can claim it back with your tax refund. You may have overpaid CPP if you worked for more than one employer or you worked for only a few months in Canada during the tax year.

What’s more, if you earn less than $3,500 in income in Canada during the tax year, you can get the entire sum you paid for CPP or QPP back.

Even, if you have not overpaid CPP you can use the amount you have contributed as a non-refundable tax credit and increase your tax refund (in cases where your 2018 earnings are more than $11,809).

Working holiday in Canada

How can I claim my refund?

You can claim your refund by filing your Canadian tax return.

If you didn’t live in Quebec on December 31, 2018 and you contributed more to CPP than you needed to, you can claim the difference on your tax return.

And if you did live in Quebec on December 31, 2018, then you can claim the excess amount on your provincial income tax return for Quebec.

Where you have worked in a province other than Quebec, you can claim up to $2,593.80 as a CPP non-refundable tax credit on your 2018 income tax return.

However, if you contributed more than the required CPP contributions you can get the overpaid amount of CPP back. The CRA will refund this overpayment or use it to reduce any balance you owe.

If you lived in Quebec on December 31, 2018 and contributed only to the QPP, do not claim more than $2,829.60 as a CPP non-refundable tax credit on your federal tax return. If you contributed more, claim the overpayment on your provincial income tax return for Quebec.

In summary, your refundable amount of the CPP depends on the CPP contributions you made during the year and the amount of income you earned.

Can anyone help me?

Canada Pension Plan for working holidaymakers

Yes!

If you, like thousands of other working holidaymakers, find Canadian tax to be a confusing subject, you can engage the services of a tax agent to help you.

Even, if you’re unsure whether you overpaid Canadian Pension Plan or not, Taxback.com can provide you with a no-obligation estimate of any refunds you are due. Then, if you like what you see you can proceed and claim your cash!

The average refund that Canadian working holidaymakers receive from Taxback.com is $998.

Claim your refund here!

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