Ever since I started blogging, I realized the possibility of becoming a full-time blogger. While I’m slowly working on it, I also get to learn how to manage a side hustle.
First I fixed my financial spreadsheet that includes my blog-related expenses then I applied for a Rogers Mastercard which serve as a business credit card.
And after I filled my income tax return in spring, I read the income tax summary with gusto as if I’m reading a digital camera manual. It’s a bit complicated but fun until I have to check my Canada Pension Plan contributions. Should I do it?
Blogger or Not: Why Should You Even Care
Bloggers should include their income in filling the income tax return in addition to being an employee (assuming that blogging is a side hustle).
I get the idea on how to do it on savespendsplurge.com and have been diligent in keeping track my finances as a blogger and an employee (for now).
As blogger I have to pay for my Canada Pension Plan (CPP) contribution which is good, not complaining at all.
As an employee, it’s easy to track how much CPP is deducted in each pay period along with the employer’s contribution.
Contributions are based on your annual earnings between a minimum amount called the Year’s Basic Exemption (YBE) and a maximum amount known as the Year’s Maximum Pensionable Earnings (YMPE). The YMPE is approximately the average Canadian wage. The YBE is $3,500 and for 2016 the YMPE is $54,900.
Note: For self-employed (including bloggers), if you are earning more than $3,500.00 then you’ll pay CPP during tax season from your own pocket. No employer contribution like a typical 9-5 job.
To avoid the tax season shock of owing the government, I increased my tax deduction in my regular job. If I owe anything then it will be deducted from my tax refund, if there’s any. Otherwise, my blog savings will take care of it. (I recently started it this year. Small step in becoming an entrepreneur.)
To make sure that what I’m paying for as self-employed goes into my retirement fund (also known as CPP), I look for ways on how to do it online.
How to Check the Canada Pension Plan Contributions
I made several attempts and would love to show you how to check CPP the easy way.
- Request online a Personal Access Code (PAC). You can also call, like I did, the toll-free number (1-800-277-9914). Prepare to provide personal information:
- Social Insurance Number
- First name
- Last name
- Date of birth
- Your mother’s last name at birth
- Wait for several days to receive the Personal Access Code through mail.
- Register for a My Service Canada Account. I prefer Option 2 which uses GCKey so that I don’t have to associate my account with any Canadian banks.
- Log in on My Service Canada Account to check your CPP Statement of Contributions which shows information that can help in retirement planning:
- Total CPP contributions for each year
- Earnings on which your contributions are based
- Estimate of what your pension or benefit would be if you and/or your family were eligible to receive it now.
- Keep a copy of your Statement of Contributions.
How did it go for me, you may ask. After I called Service Canada to request a Personal Access Code, I received an email, waited for the PAC on the mail then the rest of the steps were done online.
The funny thing is I was asked whether I am already retired. I wish I am somewhere in a tropical beach not worrying about any bills.
Well, retirement planning which includes knowing how much will I get from my pension is a good start.
What’s More to Do
Whether you are a regular employee or self-employed, create your My Service Canada Account to get a soft copy and update information:
- Employment Insurance (EI)
- Canada Pension Plan (CPP)
- Old Age Security (OAS)
It’s never too early to check the CPP contributions whether online or phone call.
If I wasn’t partly self-employed, I wouldn’t have a clue about how important it is to know how will my current contribution will affect my future.
I’m looking forward to the day that I’ll be blogging any time of the day about any topic because it is a job not needing retirement. It’s going to be a tea party with my laptop and biscuits.
As you might have guessed, I didn’t find any discrepancy with my T4 and CPP Statement of Contributions.
I even had a bonus information: I need to contribute more and definitely not only rely on my pension. That’s why I diversify my nest eggs: mutual funds, exchange traded funds, REIT, etc.
Have you check your CPP contributions? What are the ways you are doing at the present to increase the retirement fund?