Continuous Employment

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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
1 $3,500.00
12 $291.66
24 $145.83
26 $134.61
27 $129.62
52 $67.30
53 $66.03

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);
  • $67.30.
Note

You cannot use the formulas 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 on the last page of the Source Deduction Tables for QPP Contributions (TP-1015.TR-V).

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.

Example for an employee who works two months in 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.

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