Hide correct resp responses Question:pcl-3-1 William works for Allied Transport in Alberta and is paid 3,569.33 semi-monthly. He celebrated his 70^th birthday in June 2024. Calculate William's annual maximum first Canada Pension Plan contribution for 2024. 1 Correct answers:

To calculate William's **annual maximum first Canada Pension Plan (CPP) contribution** for 2024, we need to follow these steps:<br /><br />---<br /><br />### Step 1: Understand the CPP Contribution Rules<br />1. **CPP Contributions Stop at Age 70**:<br /> - Since William turns 70 in June 2024, he will stop contributing to CPP after his birthday month.<br /> - This means he will contribute to CPP only from January to June 2024 (6 months).<br /><br />2. **CPP Contribution Rate for 2024**:<br /> - The CPP contribution rate for employees in 2024 is **5.95%**.<br /><br />3. **Year's Maximum Pensionable Earnings (YMPE)**:<br /> - For 2024, the YMPE is **\$66,600**.<br /><br />4. **Basic Exemption Amount**:<br /> - The basic exemption amount is **\$3,500** annually.<br /><br />5. **Maximum Contributory Earnings**:<br /> - The maximum contributory earnings are calculated as:<br /> \[<br /> \text{Maximum Contributory Earnings} = \text{YMPE} - \text{Basic Exemption}<br /> \]<br /> Substituting the values:<br /> \[<br /> \text{Maximum Contributory Earnings} = 66,600 - 3,500 = 63,100<br /> \]<br /><br />6. **Maximum Annual CPP Contribution**:<br /> - The maximum annual CPP contribution for an employee is:<br /> \[<br /> \text{Maximum CPP Contribution} = \text{Maximum Contributory Earnings} \times \text{Contribution Rate}<br /> \]<br /> Substituting the values:<br /> \[<br /> \text{Maximum CPP Contribution} = 63,100 \times 0.0595 = 3,755.45<br /> \]<br /><br />---<br /><br />### Step 2: Adjust for William's Situation<br />Since William stops contributing to CPP after June 2024, he will contribute for **6 months out of 12 months**. Therefore, his contribution will be prorated as follows:<br />\[<br />\text{William's CPP Contribution} = \frac{6}{12} \times 3,755.45 = 1,877.73<br />\]<br /><br />---<br /><br />### Final Answer:<br />William's **annual maximum first CPP contribution for 2024** is **\$1,877.73**.<br /><br />