PIER Reviews: Understanding the Process
What Is a PIER Review?
A Pensionable and Insurable Earnings Review (PIER) is an annual, largely automated verification in which the CRA compares CPP contributions and EI premiums reported on T4 slips against what should have been remitted based on pensionable and insurable earnings. Where figures do not match, the CRA issues a PIER package flagging the discrepancy and requesting payment. These reviews ensure employees receive the correct CPP and EI benefits upon retirement, disability, unemployment, or leave.
How CRA Identifies Discrepancies
The CRA’s system calculates expected CPP by dividing total reported contributions by the applicable rate and comparing this to declared pensionable earnings. The same logic applies to EI premiums against insurable earnings. When numbers diverge, the system generates a PIER listing detailing affected employees and the balance due.
Common Causes of PIER Assessments
The CRA identifies numerous recurring errors that trigger PIER assessments: 1. Incorrect T4 box entries CPP or EI amounts in the wrong boxes, or incorrect exemption markings in box 28 2. Failure to account for the CPP basic exemption forgetting to prorate the $3,500 annual exemption or applying it multiple times during bonus runs 3. Over-remitting or under-remitting CPP from manual errors or incorrect software setup 4. Employment expense claims failing to adjust pensionable earnings when employees claim deductible expenses 5. Incorrect insurable hours for EI miscalculating which earnings are insurable 6. Failing to report taxable benefits in pensionable or insurable earnings 7. Overtime and bonus payment errors not applying CPP/EI to supplemental payments 8. Termination payment classification incorrectly classifying payments as non-pensionable 9. Missing or incorrect T4 amendments errors discovered after filing that go uncorrected 10. Software setup errors wrong province, outdated rate tables, or incorrect pay period counts
The PIER Timeline and Response
The PIER process moves quickly: Day 1 CRA sends the PIER package with 30 calendar days to respond. Day 45 If no reply or payment, CRA issues a formal Notice of Assessment. Day 65 CRA issues amended T4s. When responding, review the calculations against your payroll records, gather supporting documentation, and submit within the 30-day window. You may agree and pay, dispute with corrected calculations, or file a Notice of Objection within 90 days using Form CPT101. A critical point: if the deficiency resulted from an employer error, you may owe both the employee and employer portions of the shortfall, plus interest from the original due date. This double liability makes PIER assessments far more expensive than correcting a payroll error mid-year.
