Why is my net pay in January less than December of the previous calendar year?
There may be a number of reasons as to why your net pay may be decreased in January of a new taxation year. Most likely, this decrease is because employee and employer contributions to Employment Insurance (EI) and Canada Pension Plan (CPP) are based on all eligible earnings beginning with the first pay each January and contributions cease during the calendar year once the maximum contributions are reached. For those employees who earned more than the CPP and EI ceilings, the maximum contributions would probably have been reached prior to the December pay period. If you have any questions regarding your gross income paid, please contact your department for an explanation.