If Theresa is selfemployed and earns 75000yr and the contrib

If Theresa is self-employed and earns $75,000/yr, and the contribution rate for CPP is

4.95% for both employer and employee, and the provincial and federal tax credits rates

are 8% and 15% respectively, what would Theresa’s tax benefit be? Assume her MTR is

40%, the YMPE is $56,000 and the standard YBE applies.

Solution

Theresa Tax Benefit would be 5808.04 in 2018 as per the given case.

In the given case Yearly Maximum Pensionable earning is $56000.However ,canada government has allowed YMPE is $55900.For Self Employed we use 9.9% on 52400 after YBE(Basic Exemption) (55900-3500).