Employment is considered continuous if it does not meet the definition of non-continuous employment.
Regular pay periods
You must divide the basic exemption of $3,500 by the number of pay periods in the year. For example, if you have 26 pay periods, divide $3,500 by 26 to determine the amount of the pay period exemption.
The table below shows the exemption per pay period that applies to the salary or wages of an employee whose employment is continuous.
|Number of pay periods per year||Pay period exemption|
Irregular pay periods
If an employee's pay periods are irregular, the pay period exemption is equal to the greater of the following amounts:
- $3,500, multiplied by the number of days in the pay period and divided by 365 (if the result is an amount with a fraction of a cent, do not take the fraction into account);
An irregular pay period begins on one of the following dates, depending on which is closest to the date the remuneration is paid:
- January 1 of the current year;
- the date the employee is hired;
- the date of the employee's last pay.
You cannot use the formula in the Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) to calculate the employee QPP contribution for an employee whose employment is continuous, with irregular pay periods. You must do the calculation yourself or use the table showing the exemption per pay period in Schedule I of the Source Deduction Tables for QPP Contributions (TP-1015.TR-V).
A 50-year-old employee is employed only from March 8 to 26, 2023 (19 days), and receives wages of $900 for the entire period. The exemption for the period is $182.19 ($3,500 × 19/365).
You must withhold a QPP contribution of $45.94 (6.40% × ($900 – $182.19)).
Employee who does not work the entire year
If an employee does not work for you for the entire year, the exemption that applies to the employee's salary or wages may be less than $3,500 during the year.
You pay your employees on a monthly basis. The pay period exemption is $291.66 ($3,500 ÷ 12).
One of your employees works two months in the year. The exemption for the year for this employee is $583.32 ($291.66 × 2).
You pay pensionable salary or wages to an employee more than once
If you pay pensionable salary or wages to the same employee more than once in the same pay period, you can use the tables (and take the exemption into account) for only one such payment. For subsequent payments of pensionable salary or wages in the pay period, simply withhold the lesser of the following amounts:
- the amount of the pensionable salary or wages (without taking the exemption into account because it is already taken into account in the employee's salary or wages) multiplied by the employee's contribution rate;
- the employee's maximum contribution for the year, minus the amounts already withheld.
To see an example of the calculation, click Gratuities and Retroactive Pay.