Whether you are an employer who wishes to hire an employee from Canada or a Canadian employee, you must be aware of RRSP contributions in Canada. With Multiplier, you can follow a few simple steps to participate in this plan.
What is RRSP?
A Registered Retirement Savings Plan (RRSP) is a savings plan registered with the Canadian federal government that an employee can contribute to retirement funds.
When an employee contributes money to RRSP, the funds are ‘tax-advantaged’, meaning that they're exempt from being taxed in the year the contribution is made. Any investment income earned from investments held within the RRSP can then grow tax-deferred (an employee can postpone paying taxes on their investment until they withdraw the money) as long as the money remains within the RRSP until it's withdrawn.
Note
Participating in RRSP is not mandatory, it is optional.
After the employee has been enrolled in the RRSP contributions, the employee will receive a signup email from Manulife.
Manulife is Multiplier’s partner that manages RRSP contributions.
The employee can access all the contributions on the Manulife platform post signing up.
If the employee is an expat (does not hold Canadian citizenship), they cannot participate in RRSP.
If an employer/employee wishes to participate in RRSP contributions for Canada on the Multiplier platform, here are the steps to follow:
For an Employer
Step 1: Click on the “Hire and Onboard” section on the sidebar and select ‘Onboard an employee’.
Step 2: Select the country as Canada (CAN).
Step 3: Enter the basic details such as Name, Gender, Email ID, Job Title, Contract Duration, and Job description/Scope of work.
Step 4: On the ‘Compensation’ section of onboarding, you can participate in RRSP contributions for Canada as an employer.
4.1 Fill in the salary and pay frequency of the employee.
4.2 Add any additional pay items.
4.3: Contributions
Under the contribution section, you can view three contribution limits -
0%
2.5%
5%
4.4 Select the percentage that your company as an employer will contribute.
4.5 Upon the commencement of the employment term, we will enroll the employee in Registered Retirement Plan (RRSP).
Once you have enrolled in the RRSP contributions, a signup email will be sent to you via the Manulife platform.
Manulife is Multiplier’s pension provider in Canada. Employees can log in on the Manulife portal and view their pension details.
As an employee, you can access all the contributions on the Manulife platform post signing up.
Note
The employer will select a percentage for contribution, i.e., either 0% or 2.5%, or 5%. The employee will also select the contribution percentage that they wish to contribute to the plan, i.e., either 0% or 2.5%, or 5%.
If the employee's contribution is higher than the employer’s selected contribution limit, then the employer can continue to contribute the contribution limit (as they selected at the start).
If the employee’s contribution is lesser than the employer’s selected contribution limit, then the employer must match the percentage contribution selected by the employee.
For example - If the employee's salary is $100,000 and the company selects 2.5% as the employer contribution, and the employee selects a 5% contribution, then the employee will contribute $5000 per month while the employer will continue to contribute $2500 per month to the RRSP plan.
In the case the company selects 5% contribution and the employee selects 2.5% contribution, then the company can match the employee’s contribution since the employee’s contribution is the lesser limit among the two.
For an Employee
During the onboarding process, you will receive an email from Multiplier to sign up on the platform and add your basic, legal & bank details, and upload legal documents.
Step 1: On the ‘Legal Details’ screen, you can view the employer’s match limit toward RRSP contributions.
You can then select the contribution limit you wish to make towards RRSP contributions from the drop-down menu.
Once you have enrolled in the RRSP contributions, a signup email will be sent to you via the Manulife platform.
Manulife is Multiplier’s pension provider in Canada. Employees can log in on the Manulife portal and view their pension details.
As an employee, you can access all the contributions on the Manulife platform post signing up.
Note
The employer will select a percentage for contribution, i.e, either 0% or 2.5%, or 5%. The employee will also select the contribution percentage that they wish to contribute to the plan, i.e, either 0% or 2.5%, or 5%.
If the employee's contribution is higher than the employer’s selected contribution limit, then the employer can continue to contribute the contribution limit (as they selected at the start).
If the employee’s contribution is lesser than the employer’s selected contribution limit, then the employer must match the percentage contribution selected by the employee.
For example - If the employee's salary is $100,000 and the company selects 2.5% as the employer contribution, and the employee selects a 5% contribution, then the employee will contribute $5000 per month while the employer will continue to contribute $2500 per month to the RRSP plan.
In the case the company selects 5% contribution and the employee selects 2.5% contribution, then the company can match the employee’s contribution since the employee’s contribution is the lesser limit among the two.