CPP2 Primer

Canadian payroll users are required to make the following modifications to their books to support the new CPP2 regulations introduced for 2024.

• Step 1 - Modify the Payroll Withholdings Report
• Step 2 - Add New Expense Accounts (Optional)
• Step 3 - Add New CPP2 Accounts for Employees
• Step 4 - Edit Payrun Settings
• Step 5 - Edit Advanced Payroll Settings
• Step 6 - Edit Payroll Withholdings Settings

Step 1 - Modify the Payroll Withholdings Report

You need to update the Payroll Withholdings Report to include six new CPP2 accounts.

Step 2 - Add New Expense Accounts

You need to update the Trial Balance or Income Statement to include a new expense account for CPP2. Note that this step is optional.

Step 3 - Add New CPP2 Accounts for Employees

Employees who will receive more than $68,500 in remuneration (wages) in 2024 require a second CPP account which typically will have the format xxx-CPP2 (where xxx is the prefix used for that employee's deduction accounts).

Step 4 - Edit Payrun Settings

You should update the Payrun Settings for the first payrun in 2024 for any payroll that has employees that will earn more than $68,500 in the year.

Step 5 - Edit Advanced Payroll Settings

You should update the Advanced Payroll settings to ensure the Employer CPP2 Contribution Rate is set to 1.0.

Step 6 - Edit Payroll withholdings Settings

You should update the Payroll Withholdings prompt settings to ensure proper remittance.