An employee may elect to stop contributing to CPP, provided they are at least 65 years of age (but under 70), receive a CPP or QPP retirement pension and have earnings subject to CPP contributions.
A November 13, 2025 Tax Court of Canada case reviewed the timing of an employee’s election to cease contributing to the CPP when he began collecting retirement benefits at age 65. The employee was the sole employee and shareholder of the corporation.
The key facts were as follows:
- the employee applied for CPP effective the month he turned 65, July 2021;
- the employee filed Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, on September 14, 2021;
- the employee’s application was processed and he first received benefits on May 7, 2022, retroactive to July 2021; and
- CRA assessed the employer for CPP premiums for calendar 2022 and 2023.
The CPT30 election to cease paying CPP premiums after age 65 can only be made if a CPP retirement pension is payable to the employee. CRA argued that the election was void on the basis that retirement benefits were not payable to the employee until the application was processed and he received his first payment in May 2022. As such, CPP premiums continued to be required.
Taxpayer wins
The Court stated that adopting CRA’s interpretation could lead to an absurd result that slow processing of applications could prevent employees from making the election. It was therefore appropriate to adopt the broader interpretation that the employee had a CPP retirement benefit payable to him when he filed the election due to the CPP benefits paid retroactive to a date prior to the election. The employer was therefore not required to withhold CPP for the years under appeal.
Disclaimer: The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.