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Canada: RRSP vs. DPSP+RRSP


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Hello,

My company is evaluating two options: whether to sponsor in Canada RRSP or combined plan DPSP/RRSP.

There will be 10 employees, employee will aim to contribute annually $10,000, employer will contribute $5,000 regardless.

So can someone walk me through the costs and benefits of both plans FROM EMPLOYER's PROSPECTIVE.

My understanding is that if the employer contributes under DPSP - it will be separate from RRSP and can be deducted as operating expense. If the employer contributes into RRSP - it will be part of the salary and thus taxable to the employer as a salary. So what is the bottom line for the employer in each scenario? Also, how much does it typically cost to open/maintain the plan, etc...

I would appreciate any information or links to some useful sources, besides BenefitsCanada.

Thank you,

Kseniya

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