As an employer, in some cases, you may under deduct an employee’s CPP contributions. Once the CRA discovers the deficiency, they will issue you a notice of assessment and you are responsible for remitting the balance due including both the employer’s and employee’s shares.
You can recover the employee’s contributions from later payments to the employee. The recovered contribution can be equal to, but not more than, the amount you should have deducted from each payment of remuneration.
You cannot recover a contribution amount that has been outstanding for more than 12 months.
You cannot adjust the employee’s income tax deduction to cover the CPP shortfall.
If you should have made a deduction in a previous year and you recover it though an additional contribution in the current year, do not report the recovered contributions on the current year’s T4 slip. Instead, the CRA will amend the previous year’s T4 slips and send them to you.
The recovered amount does not affect the current year-to-date CPP contribution.