Why does my take home pay increase towards the end of the year?

If you have been paying attention to your pay, you may have noticed that you have more take home pay towards the end of the year. Changes to your take home pay are not uncommon throughout the year. These can occur for many reasons, such as changes to your province of work or residence, changes to your pay rate, deductions, or taxable allowances and benefits. Every situation is unique to each member. 

Every calendar year, the Canada Pension Plan/Quebec Pension Plan (CPP/QPP) and Unemployment Insurance (EI) contributions are deducted from a member’s earnings, until the annual maximum amounts are reached. Each member will reach their maximum amounts at a different time depending on their earnings, but it generally happens between July and December of each year. When this happens, members will see an increase in their monthly take home pay as there will no longer be any CPP/QPP and EI deductions for that calendar year. 

It is important to be aware that monthly CPP/QPP and EI deductions will restart in January. Canadian Armed Forces members should therefore not include the temporary increase in take home pay in their overall budget or long-term financial planning.

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