From: klassen@sol.UVic.CA (Melvin Klassen)
Subject: Re: Getting Canada Pension and UI money back ...
Summary: money taken out of my pay!
Keywords: Canada, tax, pension, UI, unemployment insurance
Organization: University of Victoria, Victoria, B.C. CANADA
Distribution: na
Date: Wed, 30 Dec 92 23:37:48 GMT

In article <9212300128.AA09621@goliath.Stanford.EDU> 
    Rajesh Kumar Singh <rsingh@goliath.stanford.edu> writes:
>Organization: Makalu Mountain Hermitage, Mt Makalu, Nepal
>
>SITUATION:
>I worked in Canada during the fall 89 and spring 90 and as per my coy
>of T4 (equivalent to US W-2), the following taxes were deducted.  
>All this time, my status was a student visa + a valid employment
>authorization, something similar to being on F-1 with an EAD in US.
>
> Spring 1990
>     4. Income tax:                              5522.61
>     5. Canada Pension plan, employee's portion:  507.11
>     6. Unemployment insurance:                   534.08
>
>  amount in (4) DOES NOT include amounts in (5) and (6).
>
>Upon filing tax returns, I was refunded miniscule portions of (4).

Using the 1991 Tax Tables for a resident of British Columbia,
against your "Spring 1990" earnings:
 1. your Federal Tax was $3528., your Federal Individual Surtax was $176.,
    and your B.C. Tax was $1817., totalling $5521.00
 2. your Taxable Income, i.e., after all deductions and tax-credits,
    including the Basic Personal Amount of $6,280, must have been $20750.
 3. CPP payable on self-employment earnings of (20750+6280) would be
    $1105.00 -- since you were not self-employed, your employee must
    pay half, i.e., $552.50.

So, the amounts you paid were "typical" of an employed resident of Canada,
although an income of over $27,000 for only the "Spring" is above-average!

>I am NOT ALLOWED TO APPLY FOR ANY BENEFITS that are funded by the
>contributions (5) and (6) above, 

You **are** allowed to apply to "Health and Welfare Canada" for a pension,
once you reach "retirement age".  Your pension will be calculated as an
accumulation of all the periods you have worked, or will work in Canada,
prior to your retirement.
Note that Canada has many tax-treaties with the USA.

By analogy, the UI is much like house insurance;
you can't get the money back if your house doesn't burn down!
(If it does burn down, you get **much** more money than you paid-in!)

To be eligible to collect on UI, you must meet some qualifications
laid out by "Employment and Immigration Canada", i.e., be resident in Canada, 
be actively looking for work (students normally can't collect UI),
and have worked approximately 18 weeks prior to the start of unemployment.

>and I was told at the time that I *DID NOT* have to pay these taxes.  
Did you get this statement in writing?  
Did you file any forms with Revenue Canada, requesting exemption?

>However, my company was small (<20) and we only had a part time accountant,
>so they just kept on deducting.

Probably, you were not exempt, i.e., Revenue Canada wishes to maintain
a level playing-field, i.e., any employee, either Canadian citizen or not,
is required to pay CPP and UI.  If this were not the case, the employer
would always hire non-citizens, in order to "save money".
Newsgroups: can.general