Which item is not subject to Québec Parental Insurance Plan premiums?

Which item is not subject to Québec Parental Insurance Plan premiums?

• A. Employee RRSP contributions
• B. Employer contributions to an employee's RRSP when funds are not available before termination or retirement
• C. Cash bonuses
• D. Employer contributions to an employee's RRSP when funds are available before termination or retirement

Answer: (D)

Québec Parental Insurance Plan premiums are charged on insurable earnings, but amounts that go into retirement savings arrangements are treated differently. The important point is whether the funds can be accessed during active employment. When an employer contributes to an employee’s RRSP and those funds are not accessible until termination or retirement, these contributions do not count as insurable earnings for the purpose of QPIP premiums. In that situation, no QPIP premium is applied to the employer RRSP contribution. So, among the options, the item that fits this exemption is the employer’s RRSP contribution described in a way that the funds aren’t available to the employee until termination or retirement. The other items involve either employee RRSP deductions or cash bonuses, which are treated as wages or earnings and generally do fall under QPIP premiums.

Québec Parental Insurance Plan premiums are charged on insurable earnings, but amounts that go into retirement savings arrangements are treated differently. The important point is whether the funds can be accessed during active employment. When an employer contributes to an employee’s RRSP and those funds are not accessible until termination or retirement, these contributions do not count as insurable earnings for the purpose of QPIP premiums. In that situation, no QPIP premium is applied to the employer RRSP contribution.

So, among the options, the item that fits this exemption is the employer’s RRSP contribution described in a way that the funds aren’t available to the employee until termination or retirement. The other items involve either employee RRSP deductions or cash bonuses, which are treated as wages or earnings and generally do fall under QPIP premiums.