Tax information for active members

Learn about your pension and income taxes, including what you need to know about pension adjustment amounts and your RRSP contribution limit.

Tax deductions

When you are an active member of the plan, your pension contributions are deducted from your gross pensionable earnings on each paycheque.

This means your employer deducts your pension contributions from your salary payments before deducting income tax. This reduces your taxable income – the amount of income you are taxed on while you are working.

Tax implications for high-income earners

If you are a high-income earner, there may be tax implications.

On your T4, your employer can only report the maximum deductible pension contribution limit or actual contributions, whichever is less. The maximum allowable is set by the Canada Revenue Agency each year.

If the current year’s pension contribution limit for general and Group 5 is $19,518 and total contributions made on pensionable earnings for the year is $20,000, plan members can only claim tax deductions for pension plan contributions up to $19,518.

You should work with your employer to avoid tax implications.