Cooperative Investment Plan (CIP) Deduction
The amount that you subtract from an employee's gross remuneration for a pay period (125% of the amount withheld for the purchase of preferred shares qualifying under the CIP) cannot be more than 30% of the result of the following calculation:
- the employee's gross salary or wages for the pay period;
- the amount that the employee paid to a registered pension plan (RPP) for the pay period;
- the value of the preferred shares that you transferred for the pay period, at the employee's request, to the employee's or the employee's spouse's registered retirement savings plan (RRSP).
If the amount you have to subtract exceeds 30%, contact us to find out if you can subtract the entire amount.
For example, if for a pay period the employee received a gross salary of $3,500 and made a $300 RPP contribution, and the value of the preferred shares transferred to an RRSP is $200, the maximum you can subtract for the pay period is $900 (30% × ($3,500 − $300 − $200)).
You can therefore subtract from the employee's gross remuneration for the pay period the entire amount that corresponds to 125% of the amount withheld from the employee's remuneration for the purchase of preferred shares qualifying under the CIP ($250 (125% × $200)).