Nobody Selected You

This series has spent twenty-three articles describing how CRA identifies a business worth examining. This article describes the one process where that question never arises, because the check runs on everybody.

A Note On Currency

Everything here is stated as verified in August 2026 and requires confirmation before reliance. Contribution rates, maximums and exemptions in this area are set annually and change every year.

We report specific 2026 figures from a commercial source which itself indicated that one of them would only be confirmed closer to the year, and we flag that where it appears[1]. Rates must be taken from CRA's payroll deductions tables for the year concerned.

We have not verified any statutory provision against the legislation. Where we describe CRA procedure we have worked from the Agency's own pages, and we identify where a point comes from commentary instead.

This is not tax or payroll advice. An employer facing a deficiency notice should have the underlying calculations reviewed rather than pay a figure because it arrived on a listing.

This Is Not An Audit

The structural point, and it changes how an employer should think about payroll risk. This section is our own analysis of what CRA describes.

CRA states that every year it reviews the information on T4 slips to ensure that required amounts of CPP and EI, calculated from the employee's pensionable and insurable earnings, match the reported amounts on the slips[2].

Note what is absent from that description.

There is no selection, no risk assessment, no sampling and no threshold. The comparison is performed on the information returns an employer has already filed, using figures the employer itself reported.

Three consequences follow, and they are ours.

Detection is not a variable. Across this series, most exposures have carried an implicit probability: whether a file is selected, whether a pattern is noticed. Here the arithmetic is checked as a matter of course.

The evidence is already in the Agency's hands. Nobody has to request records, because the comparison uses the slips and the summary the employer filed.

And the error is arithmetic rather than judgmental. There is no characterisation question of the kind that has occupied so much of this series. Either the deductions reconcile to the reported earnings or they do not.

That makes this the most avoidable exposure in the entire series, and also the least forgiving, because there is nothing to argue about once the numbers are in.

How The Check Is Performed

The mechanics, in CRA's own description.

It states that it checks the calculations by matching the pensionable and insurable earnings you reported with the required CPP contributions or EI premiums shown in the Payroll Deductions Tables, then comparing those required amounts with the CPP contributions and EI premiums reported on the T4 slips. Where there is a difference, the figures are printed on a PIER listing[3].

So the calculation runs in two steps, and this is our own reading of why that matters.

First, CRA derives what should have been deducted, from the earnings figures the employer reported.

Second, it compares that to what the employer said it did deduct, also from the employer's own slips.

Both inputs come from the employer. The Agency is not asserting a different view of the facts; it is testing the employer's own numbers for internal consistency.

That has an important implication for how a deficiency should be approached. A PIER difference means one of the two reported figures is wrong, and it is frequently the earnings figure rather than the deduction figure.

An employer whose earnings boxes were populated incorrectly will show a deficiency even where every dollar deducted from every employee was correct, and the answer in that case is a correction rather than a payment.

Why It Exists

The purpose, which is not primarily revenue and which reframes the whole process.

CRA states that it verifies the CPP and EI calculations so that your employee or their beneficiaries will receive the proper CPP benefits if the employee retires, becomes disabled, or dies, and the proper EI benefits where the employee takes maternity, parental, adoption or compassionate care leave, or leave to care for a family member who is critically ill or injured[2].

That is worth pausing on, and this is our own analysis.

CPP and EI are contributory. An individual's entitlement depends on the contributions recorded against them. An under-deduction is therefore not only an unpaid amount; it is a gap in someone's benefit record.

The person harmed by an employer's payroll error is, in the first instance, the employee, and the harm may not surface for decades.

That explains the design. A universal annual reconciliation is a disproportionate response to a revenue problem and a proportionate one to a benefit-integrity problem, which is what this is.

It also explains why the process is corrective rather than punitive in character, and why CRA amends the slips itself, as described below.

We would put that to employers as a reason to treat a PIER seriously beyond the money. A deficiency left unresolved leaves an employee's contribution record understated.

Including Your Employee's Share

The sentence that determines the cost, and CRA states it twice.

On the PIER page, it states: You are responsible for remitting the balance due, including your employee's share[3].

On its corrections guidance, it states that if you discover you have under-deducted CPP or EI, you are responsible for remitting the balance due for both the employer's and employee's shares, and that if you do not remit the amount you may receive a PIER review[4].

The logic is straightforward and this is our own reading of it.

The employer's obligation is to deduct and remit. Having failed to deduct, the obligation to remit is unaffected, because the Crown's entitlement does not depend on whether the employer collected.

That is the same principle this series has now encountered in five sales tax contexts, and it applies here with a difference that makes it worse.

In the sales tax cases the supplier could, in principle, invoice the customer for the omitted amount. The commercial relationship existed and the counterparty was a business.

Here the counterparty is an employee, the amount relates to a closed year, and recovery is constrained by employment relationships and by whether the person is still there.

The next two sections quantify that.

What Both Shares Costs

The magnitude, computed by us using a CPP contribution rate reported at 5.95 percent.

Commentary records that CPP contribution rates have risen from 4.95 percent in 2010 to 5.95 percent in 2024, reflecting the CPP enhancement[5].

Because the employer matches, the combined rate on a pensionable amount is roughly 11.9 percent, on our own calculation.

Applied to amounts that should have been pensionable but were not treated as such:

$10,000 missed produces roughly $595 of employee share and $595 of employer share, being about $1,190.

$50,000 produces roughly $5,950.

$150,000 produces roughly $17,850.

$400,000 produces roughly $47,600.

Those figures are CPP only. EI is additional, and its rates and the employer multiple are set annually, so we have not computed it.

Two observations, ours. The amounts scale with the earnings involved rather than with the size of the error, so a small systematic misclassification applied across a workforce produces a large number.

And because the deficiency is computed per employee, a treatment error affecting every employee produces a deficiency on every line of the listing.

The Recovery Problem

Why the employee share is frequently not recoverable in practice. This section is our own analysis.

An employer that under-deducted has, in principle, a claim to recover the employee's share from the employee, subject to the rules governing recovery which we have not examined.

Whether that is realistic depends almost entirely on whether the employee is still there.

On $150,000 of missed pensionable earnings, our own figures give an employee share of roughly $8,925 and a total of $17,850.

Where all affected staff remain employed, the employer might recover up to $8,925 and absorb the same amount.

Where forty percent have left, recovery falls to roughly $5,355 and the absorbed amount rises to roughly $12,495.

Where none remain, nothing is recoverable and the employer absorbs the whole $17,850.

Three points follow.

The exposure is worse in high-turnover sectors, which are frequently the sectors with the least payroll sophistication. Hospitality, retail, construction and staffing all have both characteristics.

The exposure grows with delay, because turnover accumulates. An error found in the following year has a better recovery profile than the same error found four years later.

And recovery from a current employee is itself difficult in practice. Deducting a prior year's shortfall from a current employee's pay is a conversation few employers want and one that has its own legal constraints.

Three Programs, Not One

The wider payroll compliance landscape, which employers frequently conflate.

CRA describes conducting reviews to make sure employers and payers are meeting their obligations, contacting them by letter, by phone or by sending out a notice to advise that an account has been selected for review. It identifies distinct programs[6].

Trust accounts examinations, described as payroll and GST/HST account reviews done to make sure the employer has met all its withholding and reporting obligations[6].

Pensionable and insurable earnings reviews, described as done to ensure enough CPP contributions and EI premiums have been deducted[6].

And a tax deduction, CPP and EI discrepancy notice, identified by CRA as PD4R[6].

The distinction matters and this is our own analysis.

A PIER is a reconciliation of the employer's own filed figures. A trust accounts examination is a genuine examination, with the selection, scope and evidence-gathering that implies, and it covers withholding and reporting obligations generally rather than only CPP and EI arithmetic.

An employer that receives a communication should establish which program it is from, because the appropriate response differs substantially.

Responding to a reconciliation notice as though it were an audit wastes resources. Responding to an examination as though it were a reconciliation understates what is happening.

What Actually Arrives

The documents, and what they contain.

CRA states that it sends the listing showing the name of the affected employees and the figures used in the calculations, together with a PIER summary that shows any balance due[3].

It adds that where the employer files electronically and reports an employee number on the T4 slips, the employee number is displayed on the listing[2][3].

It also describes a payment route: using its business account service, an employer will have a proceed to pay option in the PIER overview section, allowing payment of the deficiencies in full without replying, or payment of any remaining deficiencies after providing a response[2].

Two observations, ours, and the second matters.

The listing is employee by employee with the Agency's own figures, which is unusually transparent. An employer can see exactly which employees produced the difference and what earnings figures were used, which makes the deficiency checkable rather than a bare demand.

And the existence of a pay-in-full-without-replying option is a convenience with a risk attached. It is quick, and for a genuine deficiency it is the right answer.

But where the underlying earnings figures were reported incorrectly, paying resolves the balance while leaving the wrong figures on the record. The employee's contribution record is then based on an amount that was never right.

An employer should establish whether the deficiency reflects an under-deduction or a reporting error before choosing which route to take.

Do Not Send Amended Slips

A procedural instruction that is easy to get wrong through helpfulness.

CRA states plainly: do not send amended T4 slips. The CRA will issue any amended slip to you[2].

It elaborates that where adjustments are required on T4 slips due to a PIER, CRA will prepare two copies of the amended slip and forward them to the employer: one for the employer's records and one to give to the employee[2].

Three points, ours.

The instinct of a diligent payroll administrator receiving a discrepancy notice is to correct the slips and resubmit. That instinct is wrong here and can create duplicate or conflicting records.

The employer nonetheless has an obligation at the end of the process, which is to give the amended slip to the employee. That step is easy to overlook once the balance has been paid, and it is the step that closes the loop for the individual.

And the fact that CRA produces the amended slip is consistent with the benefit-integrity purpose described earlier. The Agency is correcting the contribution record, not merely collecting an amount.

An employer that pays a deficiency and never distributes the amended slips has resolved its own liability and left the employee without the document evidencing the correction.

The Delayed Detection Trap

A quiet provision affecting larger employers, and it delays rather than removes the problem.

CRA states that if an employer has a business number with multiple payroll program account extensions, it will not send a PIER report where deficiencies are detected when the return is processed. At a later date it will compare all T4 returns for the business number to verify the PIER information and will contact the employer if deficiencies are confirmed[3][2].

The reason is sensible and this is our own reading.

An employee may appear on slips from more than one payroll account under the same business number. Assessing a deficiency on one account in isolation could produce a wrong answer, since maximums and exemptions operate across the employment relationship rather than the account.

The practical consequence for such an employer is a false sense of security.

The absence of a PIER report in the spring does not mean the returns reconciled. It may mean the employer is in the category where the comparison happens later.

Two implications. A multi-account employer should not treat silence as confirmation, and should perform its own reconciliation across accounts rather than waiting.

And when contact does come, it arrives further from the year in question, which worsens the recovery profile described earlier as staff turn over in the interval.

The Boxes That Have To Agree

The mechanics at slip level, since that is where the reconciliation happens.

Commentary identifies the relevant boxes: pensionable earnings recorded in box 26, CPP and QPP contributions in boxes 16, 16A, 17 and 17A, and notes that if the pensionable earnings are incorrect, the contribution calculations will also be incorrect[7].

CRA's own material refers additionally to box 14 for employment income, box 38 for security options benefits, and box 28 for exempt status[3].

The observation we would draw out, which is ours, is that the reconciliation runs on the earnings boxes, not on gross pay.

An employer whose payroll system computed deductions correctly, but populated the pensionable or insurable earnings boxes wrongly, will show a deficiency it does not have.

That happens more often than it should. Boxes 24 and 26 are frequently left blank or defaulted, benefits are included in employment income but omitted from pensionable earnings, and mid-year changes in exempt status are handled inconsistently.

So the first question on receiving a listing is not how much do we owe. It is are the earnings figures CRA used the right ones, because those figures came from the employer.

Where they did not, the answer is a correction to the reporting, not a payment.

Pensionable But Not Insurable

A specific trap CRA identifies by name, and it is unusually precise.

CRA states that the PIER program checks security options reported as a non-cash taxable benefit in box 38 and box 14, because such a benefit is pensionable but not insurable. It instructs that if this type of benefit is the only amount reported on a T4 slip, the employer should enter an X or a check mark in box 28 under EI, but should not place an X or check mark in the CPP exempt box, because the benefit is pensionable and CPP contributions are required[3].

Two things make that worth reproducing in full, and this is our own view.

It is a rare instance of the Agency publishing the exact treatment for a specific fact pattern, including which box to tick and which not to. An employer in that situation has an unambiguous instruction.

And it illustrates the general principle underneath. Pensionable and insurable are different tests, and an amount can be one without being the other.

Employers routinely treat the two as a single concept, populating both earnings boxes with the same figure. Where an amount is pensionable but not insurable, or vice versa, that produces a deficiency on one side and an over-deduction on the other.

The scenario CRA describes, a slip carrying only a security options benefit, typically arises for a former employee exercising options after departure. That is precisely the population an employer is least likely to have deducted from and least able to recover from.

Proration And The Exemption

A calculation feature that generates deficiencies quietly.

CRA states that an employer has to prorate the maximum CPP contribution in defined situations, and directs employers to stop deducting CPP when an employee reaches the maximum contribution for the year in their employment with that employer[8].

Commentary notes that CPP contribution rates, maximums and exemptions are updated annually[7], and that earnings below the exemption amount are not deducted at all[1].

We have not set out the proration situations or the exemption mechanics, which must come from CRA's current guidance.

What matters for this article is where the errors arise, and these are our own observations.

The basic exemption is applied per pay period, so a change in pay frequency mid-year, an extra pay period, or a shift between weekly and biweekly cycles changes the total exemption applied across the year.

Employees who start or leave mid-year, who turn eighteen, who reach the age at which contributions change, or who are absent for part of the year all raise proration questions.

And these are precisely the calculations a payroll system performs automatically, which means an employer will rarely notice an error until the reconciliation surfaces it.

The practical response is to check the proration cases specifically at year end rather than reviewing payroll as a whole: starters, leavers, age transitions, absences and any change in pay frequency.

Two Employers, Two Maximums

A feature that surprises both employers and employees.

CRA states that the CPP annual maximum pensionable earnings apply to each job the employee holds with different employers, being different business numbers, and that it is important to calculate and report the proper deductions and insurable and pensionable earnings on both T4 slips[8].

Three consequences, ours.

An employer cannot reduce its deductions because it knows an employee has other employment. Each employer applies the maximum to the earnings it pays.

The employee may therefore over-contribute across the year, and their remedy is on their personal return rather than through either employer.

And an employer that helpfully stops deducting because an employee says they have reached the maximum elsewhere has created a deficiency that will appear on the listing, with both shares payable.

This is a recurring point of friction in sectors with part-time and multiple-job workers, where employees frequently and reasonably ask for deductions to stop.

The correct answer is that the employer applies the rules to the employment it controls, and the employee addresses any over-contribution when they file.

The Complexity Added In 2024

A change that increased the number of ways a calculation can go wrong.

Commentary states that starting 1 January 2024, employers must deduct a second additional CPP contribution, referred to as CPP2, on earnings above the annual maximum pensionable earnings, as part of the CPP enhancement[5].

Another notes that as of 2024 there is a CPP2 rate and maximum that needs to be accounted for, in boxes 16A and 17A for QPP[7].

On the current-year figures, a commercial source reports that CPP base deductions end at $71,300 of earnings and CPP2 continues until $81,200, with EI contributions stopping once $65,700 is earned per employer[1].

We flag that source's own caveat: it states that the final EI premium percentage would only be confirmed closer to the year[1]. Figures must be taken from CRA's tables.

The structural point is ours and it is simple.

Before 2024 an employer had one CPP ceiling and one EI ceiling to track. Now there are three thresholds on our count, at different amounts, with a second CPP band sitting between the first ceiling and its own.

Each threshold is a point at which a calculation changes, and each is a place a system configured before 2024 can be wrong.

An employer whose payroll software was set up before that change, or who computes payroll manually, should specifically confirm that the second band is being handled and reported in the correct boxes.

Where Deficiencies Come From

The common causes, offered as our own analysis drawing on the material above.

Taxable benefits omitted from pensionable earnings. A benefit included in employment income but not carried into box 26 produces a deficiency on every affected employee. This series described automobile benefits separately, and a standby charge is exactly this kind of amount.

The pensionable and insurable distinction collapsed. Treating the two as one figure produces errors wherever an amount is one but not the other, as with the security options case CRA identifies.

Proration mishandled for starters, leavers, age transitions and pay-frequency changes.

Deductions stopped early because an employee reported reaching a maximum with another employer.

The second CPP band not configured or reported correctly since 2024.

Earnings boxes left blank or defaulted, so the reconciliation runs against a figure that was never the real pensionable or insurable amount.

Exempt status applied inconsistently, including partial-year changes.

The first of those is the one we would check first in any owner-managed business, because benefits are the amounts least likely to have been routed through payroll properly.

You Cannot Change The Nature Of The Income

A short prohibition with wide consequences, stated by CRA in its corrections guidance.

It says that the employer cannot change the nature of the income paid, for example from salary to dividends, and that depending on the situation this is considered retroactive tax planning and inaccurately changing the reporting of the income. It frames the general obligation as being on the taxpayer, the employer and the payee to report the income accurately, while noting that an employer can correct a reporting error[4].

The distinction being drawn is between two different things, and this is our own reading.

Correcting an error means the record did not reflect what happened, and fixing it makes the record accurate.

Changing the nature of income means the record did reflect what happened, and the change makes it reflect something else that would have been preferable.

The first is permitted; the second is not.

That is a clean principle and it is uncomfortable in practice, because the two frequently look similar at a year-end close when nothing has been formally decided.

Why That Matters To An Owner-Manager

The connection to an earlier article in this series, which is direct. This section is our own analysis.

The shareholder loan article described how such accounts are typically cleared: the corporation declares a salary or dividend sufficient to eliminate the balance, and the choice between those two forms is made at the year-end close.

Read that against CRA's statement that an employer cannot change the nature of income paid, for example from salary to dividends, and that doing so is considered retroactive tax planning[4].

The two sit uneasily together, and the distinction that reconciles them is whether the decision was made before or after the fact.

An owner who decides in advance to take remuneration in a particular form, and whose records reflect that decision as it is implemented, is characterising income.

An owner who takes money during the year without deciding, and then at the close selects the label that produces the better outcome, is doing something the guidance describes adversely.

Two practical consequences.

The compensation decision should be made and recorded during the year, with resolutions dated when taken, not assembled afterwards.

And where salary is the chosen form, it carries payroll consequences that dividends do not: source deductions, CPP, remittance deadlines and T4 reporting. Deciding on salary at a year-end close means those obligations were not met during the year, which is its own problem and one that surfaces in exactly the reconciliation this article describes.

What A Trust Examination Looks At

The broader examination, distinguished from the reconciliation. This section is our own analysis of what CRA describes as covering all withholding and reporting obligations[6].

Remittance timing against the required frequency, since the deadline depends on remitter type and changes as payroll grows.

Taxable benefits, tested for whether they were valued, included in income, and carried into the correct earnings boxes.

Worker classification, where individuals are paid as contractors, which this series has addressed in other contexts.

Amounts paid other than through payroll, including expense reimbursements, allowances and payments to individuals from accounts outside the payroll system.

Directors' and owners' remuneration, including amounts credited rather than paid.

Slips filed against amounts paid, and whether every individual who received remuneration received a slip.

Records supporting exempt determinations, including CPP and EI exempt status.

The fourth item is where we would expect most findings in a smaller business, because payments made outside the payroll system are the ones nobody applied the payroll rules to.

What Records Survive

A year-end reconciliation of pensionable and insurable earnings to employment income, per employee, prepared before filing rather than after a listing arrives.

A schedule of taxable benefits showing valuation, the period, and whether each is pensionable, insurable, or both.

Proration working papers for starters, leavers, age transitions, absences and any change in pay frequency.

Evidence supporting any exempt status, including the date any change took effect.

Payroll system configuration records for the contribution bands, confirmed after any rate or threshold change.

The PIER listing and summary, with the employer's own recalculation of each line.

Amended slips received from CRA, with evidence of distribution to employees.

Dated resolutions for owner remuneration, made when the decision was taken.

What To Do

Reconcile before you file, not after the listing. CRA states it performs this check every year on the figures you report, so the comparison is entirely predictable.

Check the earnings boxes first when a listing arrives. A deficiency frequently means the pensionable or insurable earnings figure was wrong, not that the deduction was, and the answer is then a correction rather than a payment.

Do not send amended T4 slips. CRA states plainly that it will issue any amended slip to you, in two copies, one of which is for the employee.

Distribute the amended slips. Paying the balance resolves the money and leaves the employee without the document evidencing the correction to their contribution record.

Treat pensionable and insurable as separate tests. CRA identifies security options as pensionable but not insurable, with specific instructions on which exempt box to tick.

Never stop deducting because an employee reports reaching a maximum elsewhere. The maximum applies to each employer separately, and the employee's remedy is on their own return.

Confirm your system handles the second CPP band. It has applied since 2024 and adds a threshold that pre-2024 configurations will not have.

Do not treat silence as clearance if you have multiple payroll accounts. CRA states it will not issue a report at processing in that case and will compare returns later.

Route every payment to an individual through payroll. Amounts paid outside it are the ones nobody applied the rules to.

Decide and document owner remuneration during the year. CRA describes changing the nature of income at the close as retroactive tax planning.

The Limits Of This Analysis

Several caveats matter. This is not tax or payroll advice; an employer facing a deficiency should have the underlying calculations reviewed rather than pay a figure because it appeared on a listing. Everything is stated as verified in August 2026 and requires confirmation; contribution rates, maximums and exemptions are set annually and change every year, and must be taken from CRA's payroll deductions tables for the year concerned. The 2026 threshold figures reported here come from a commercial source which itself indicated one of them would only be confirmed closer to the year. We have not verified any statutory provision against the legislation, and have not examined the rules governing an employer's recovery of an employee's share, which constrain the recovery analysis we have offered. We have not set out the proration situations, the basic exemption mechanics, the contribution rates and maximums for any year, the EI premium rate or employer multiple, or the remittance frequency rules. One CRA page was accessed through a third-party reproduction rather than from the Agency's own site. All arithmetic is our own, applies a reported CPP rate to hypothetical amounts, covers CPP only and excludes EI entirely, and is illustrative only; the recovery illustration assumes recovery is legally available, which we have not established. The characterisation of the process as universal rather than selective, the analysis of why earnings boxes should be checked before paying, the delayed-detection observation, the common-causes list, the reconciliation of the retroactive planning point with owner remuneration practice and the trust examination structure are our own. This article does not address income tax withholding rates, remittance frequencies and thresholds, Quebec's parallel regime, provincial payroll taxes, workers' compensation, or the appeal route for a CPP or EI rulings determination.

Related Reading

Compliance & Reporting Director Liability For Source Deductions And GST Who becomes personally liable when the amounts described here are not remitted. Corporate Tax The Charge That Never Depreciates A benefit that is pensionable, frequently large, and routinely omitted from the earnings boxes. Corporate Tax The Whole Loan, Not The Interest The account usually cleared by a year-end choice between salary and dividend.

Frequently Asked Questions

Were we selected for this?

No. CRA states that every year it reviews the information on T4 slips to confirm that required CPP and EI amounts match reported amounts. There is no selection, sampling or threshold described, and the comparison runs on figures the employer itself filed. It is a reconciliation rather than an audit.

Do we really owe the employee's share too?

CRA says so twice. Its PIER page states you are responsible for remitting the balance due including your employee's share, and its corrections guidance says you are responsible for both the employer's and employee's shares where you have under-deducted. Recovery from the employee is a separate question and depends on whether they are still there.

How much can this be?

On our calculation at a reported 5.95 percent CPP rate, both shares combine to roughly 11.9 percent, so $150,000 of missed pensionable earnings produces about $17,850 of CPP alone. EI is additional. Because the amounts scale with earnings, a small systematic misclassification across a workforce produces a large figure.

Should we just pay the balance shown?

Not before checking. The reconciliation uses the earnings figures the employer reported, so a deficiency may mean those figures were wrong rather than that deductions were short. Paying resolves the balance while leaving incorrect figures on the employee's contribution record. Establish which it is first.

Should we send corrected T4 slips?

No. CRA states plainly not to send amended slips and that it will issue any amended slip to you, in two copies, one for your records and one to give the employee. That last step is easy to forget once the balance is paid, and it is what closes the loop for the individual.

An employee says they hit the CPP maximum at another job. Can we stop?

No. CRA states the annual maximum applies to each job the employee holds with different employers, and that proper deductions and earnings must be reported on both slips. Stopping creates a deficiency with both shares payable. The employee addresses any over-contribution on their own return.

References

1. SMR CPA. (2026). 2026 CPP and EI Rates, on earnings below the exemption amount not being deducted at all; on CPP base deductions ending at $71,300 of earnings and CPP2 continuing until $81,200, with EI contributions stopping once $65,700 is earned per employer; on earnings caps for CPP continuing to climb annually in line with wage growth; and on the final EI premium percentage only being confirmed closer to the year. Note: a commercial accounting publication; figures are forward-looking and the source itself indicates one is unconfirmed. Rates must be taken from CRA's payroll deductions tables. smrcpa.ca
2. Canada Revenue Agency. Pensionable and Insurable Earnings Review (PIER), on CRA reviewing the information on T4 slips every year to ensure that required amounts of CPP and EI calculated from the employee's pensionable and insurable earnings match the reported amounts on the slips; on the purpose being that the employee or their beneficiaries receive the proper CPP benefits if the employee retires, becomes disabled or dies, and the proper EI benefits on maternity, parental, adoption or compassionate care leave or leave to care for a critically ill or injured family member; on discrepancies being printed on a PIER listing, with the employee number displayed where the employer reports electronically; on the instruction not to send amended T4 slips because CRA will issue any amended slip; on CRA preparing two copies of an amended slip and forwarding them, one for the employer's records and one for the employee; on the proceed to pay option available in the PIER overview section allowing payment in full without replying or payment of remaining deficiencies after a response; and on CRA comparing all T4 information returns for a business number where the employer has multiple payroll program account extensions. Note: a CRA primary publication. canada.ca — PIER
3. Canada Revenue Agency. Pensionable and Insurable Earnings Review (PIER), accessed through a third-party reproduction, on CRA checking the calculations by matching reported pensionable and insurable earnings with the required CPP contributions or EI premiums shown in the Payroll Deductions Tables and comparing those to the amounts reported on the slips; on CRA sending the listing showing the names of affected employees and the figures used, together with a PIER summary showing any balance due; on the employer being responsible for remitting the balance due, including the employee's share; on the PIER program checking security options reported as a non-cash taxable benefit in box 38 and box 14 because such a benefit is pensionable but not insurable, with instructions to enter an X or check mark in box 28 under EI but not in the CPP exempt box where such a benefit is the only amount on the slip; and on CRA not sending a PIER report at processing where an employer has multiple payroll program account extensions, comparing all T4 returns for the business number at a later date. Note: CRA content accessed through a third-party reproduction rather than the Agency's own site. CRA PIER page (reproduction)
4. Canada Revenue Agency. Make Corrections Before Filing, on the obligation of the taxpayer, the employer and the payee to report income accurately, and on the employer being able to correct a reporting error; on the employer not being able to change the nature of the income paid, for example from salary to dividends, and on that being considered retroactive tax planning and inaccurately changing the reporting of the income depending on the situation; and on the employer being responsible, where it discovers it has under-deducted CPP or EI, for remitting the balance due for both the employer's and employee's shares, with a PIER review possible if the amount is not remitted. Note: a CRA primary publication. canada.ca — make corrections
5. Achen Henderson. (2026, February). Understanding CPP and EI Payroll Deductions, on employers being required from 1 January 2024 to deduct a second additional CPP contribution on earnings above the annual maximum pensionable earnings as part of the CPP enhancement; and on CPP contribution rates having gradually increased from 4.95 percent in 2010 to 5.95 percent in 2024. Note: a professional accounting publication. achenhenderson.ca
6. Canada Revenue Agency. Payroll Compliance and Enforcement, on CRA conducting reviews to make sure employers and payers are meeting their tax obligations and contacting them by letter, by phone or by sending a notice to advise that an account has been selected for review; on trust accounts examinations being payroll and GST/HST account reviews done to make sure withholding and reporting obligations have been met; on pensionable and insurable earnings reviews being done to ensure enough CPP contributions and EI premiums have been deducted; and on the tax deduction, CPP and EI discrepancy notice identified as PD4R. Note: a CRA primary publication. canada.ca — payroll compliance
7. Wagepoint. (2025, December). How to Avoid a PIER Report: A Small Business Guide, on a PIER report being CRA's way of checking whether CPP contributions or EI premiums match what was reported on year-end T4 statements, and on CRA sending a report outlining the names of affected employees and the figures used; on most discrepancies coming from pensionable or insurable earnings calculated incorrectly; on CPP contribution rates, maximums and exemptions being updated annually; on a second additional CPP contribution rate and maximum needing to be accounted for as of 2024 in boxes 16A and 17A for QPP; on pensionable earnings being recorded in box 26 and CPP or QPP contributions in boxes 16, 16A, 17 and 17A; and on incorrect pensionable earnings producing incorrect contribution calculations. Note: a payroll software publication. wagepoint.com
8. Canada Revenue Agency. About the Deduction of Canada Pension Plan (CPP) Contribution, on stopping deductions for current employees when the employee reaches the maximum contribution for the year in their employment with that employer; on situations in which the maximum CPP contribution has to be prorated; on the CPP annual maximum pensionable earnings applying to each job the employee holds with different employers, being different business numbers; and on the importance of calculating and reporting the proper deductions and insurable and pensionable earnings on both T4 slips. Note: a CRA primary publication; we have not set out the proration situations. canada.ca — CPP deduction

This article is provided for general informational purposes and is not tax or payroll advice. Contribution rates, maximums and exemptions are set annually and must be taken from CRA's payroll deductions tables for the year concerned. The authors have not verified any statutory provision against the legislation, have not examined the rules constraining an employer's recovery of an employee's share, and have not set out proration, exemption, rate or remittance frequency mechanics. All arithmetic is the authors' own, covers CPP only, and is illustrative.