@Nezzer “So in the case where the employee is, say 22, and worked for 10 weeks in the summer, paid every 2 weeks, I should still enter 26 in both fields. Correct?”
No, this is incorrect. As I noted in my prior response, the number of pensionable pay periods is = 5
@sarka “The “Number of pensionable pay periods” is the number of those periods in the calendar year to which CPP calculations apply based on whether or not the employee is required to contribute to CPP (regardless of whether or not they worked for the full year).”
I disagree. It does matter if they work the full year or not. “Number of pensionable pay periods” is the number of pay periods they were actually paid while they were pensionable (i.e. > 18 yrs old and <70 yrs old and not otherwise CPP exempt). Let’s take an extreme case to illustrate my point. Suppose a company pays monthly and an employee is pensionable for the whole year and is paid $3500/month, but only works one month. If you input “12” in both “type of pay period” and “number of pensionable pay periods”, taxcycle will adjust the CPP contributions to nil, and you might be tempted to say this is correct, especially if this is the only employer that this person works for for the whole year (given that $3500 is the basic exemption). But this is not true. If this employee worked for the same pay for 12 different employers throughout the year, clearly the CPP contributions required by this employee is not going to be nil. The amount that should actually be withheld each month (or by each employer in my example) is $163.63. If the person really does get paid only once from one employer for the whole year, that person will get it all back on their T1 as an overcontribution…and the $163.63 company CPP contribution is simply a gift to the federal government. The company always loses.
Play around with the payroll online calculator or follow the manual calculation for CPP steps to confirm all of this for one’s self.