If you’re retired or nearing retirement, you’ll be looking forward to your monthly Canada Pension Plan (CPP) payments.
As long as you’ve contributed to the CPP at least once in your lifetime, you can apply for and receive CPP benefits. It’s helpful to understand how these payments are calculated and when they’re paid out.
Read on to find out how much you can expect to be paid and what the payment dates are for 2024.
Key Points You Should Know About The CCP
| What is it? | The Canada Pension Plan is a taxable benefit that replaces some of your income when you retire |
| Who’s eligible? | Individuals who are at least 65 years old and have made at least one CPP contribution during their working years. |
| How much can you get? | The maximum monthly CPP payment for 2024 is $1,364.60 for those who are at least 65 years old. |
| CPP payment dates for 2024 | CPP payments are made on a monthly basis, usually close to the end of each month. |
What Is the Canada Pension Plan?
The Canada Pension Plan (CPP) is a taxable benefit that replaces some of your income when you retire. If you qualify, you’ll receive it in monthly installments for the rest of your life.
To receive this benefit, you must apply ahead of when you want your pension to start.
When Can You Recieve Your CPP Payment?
Most people start collecting their CPP payments at the standard retirement age of 65. However, you can start collecting your CPP payments as early as 60 years old or as late as 70 years old.
Do note that your CPP payments will be lower the earlier you start collecting them.
CPP Payment Dates For 2024
So when exactly will you get your CPP payments if you qualify? For 2024, the CPP payment dates are as follows:
| January 29, 2024 |
| February 27, 2024 |
| March 26, 2024 |
| April 26, 2024 |
| May 29, 2024 |
| June 26, 2024 |
| July 29, 2024 |
| August 28, 2024 |
| September 25, 2024 |
| October 29, 2024 |
| November 27, 2024 |
| December 20, 2024 |
Are You Eligible To Collect CPP?
To be eligible for a CPP retirement pension, you must:
- Be at least 60 years old
- Have made at least one valid contribution to the CPP
| Note Valid contributions to the CPP can come from work you did in Canada or by receiving credits from a former spouse or common-law partner upon the end of the relationship. |
How Do You Apply For The CPP Benefit?
You can apply for the CPP benefit by applying online or by submitting a paper application.
Apply Online
You can apply online through your My Service Canada Account. When applying online, you can choose when you want your payments to start and can get an estimate of what you’ll receive. After applying, it’ll take 7 to 14 days before you get an answer.
Submit Paper Application
To submit a paper application, you’ll need to download and fill out the application form called “Application for a Canada Pension Plan Retirement Pension”. Once completed, you’ll need to mail it to your nearest Service Canada office. It can take up to 120 days to get an answer, but it can take even more time if there’s any missing information on your application.
How Much CPP Can You Get?
The amount you receive through your CPP payments depends on several factors, including:
- The age you decide to start collecting CPP
- The amount you contributed to the CPP
- The time you contributed to the CPP
- Your average earnings throughout your working life
Maximum CPP Payment For 2024
| Maximum Benefit Payment Amounts 2024 | |
| Canada Pension Plan (CPP) at age 65 | $1,364.60 |
The Age You Decide To Start Collecting CPP
Depending on the age you decide to start collecting your CPP payments, the amount you receive will differ. If you start collecting your payments at 60 years old (the earliest you can start), you’ll receive up to 36% less than if you had waited to start at 65 years old. The amount you receive before you reach 65 is decreased by 7.2% per year.
You get the most when you start collecting it at age 70. For each year you delay your payments after 65, the amount you receive will increase by 7.2% per year, up to a maximum of 42%.
The Amount You Contributed To The CPP
Everyone over the age of 18 who works (outside Quebec) and earns at least $3,500 annually must make contributions to the CPP, with few exceptions. If you put more into the CPP when you were working, you’ll receive larger CPP payments when you start collecting CPP.
CPP Contribution Rates In 2024
The CPP contribution rates for 2024 are as follows:
| Employee and Employer Contribution Rate Split | Self- Employed Contribution Rate | Earnings Ceiling Estimation | Employee and Employer Maximum Yearly Contribution Estimation | Self-Employed Maximum Yearly Contribution Estimation |
| 5.95% | 11.9% | $68,500 | $3,867.50 | $7,735.00 |
The Time You Contributed to the CPP
The longer you contribute to the CPP, the more you’ll receive when you start collecting payments. To receive the maximum CPP amount, you’ll need to contribute to your CPP for at least 39 years. For those who are 70 years old or older, you are no longer required to contribute to your CPP. This applies to those who may still be working.
Your Average Earnings Throughout Your Working Life
The higher your average earnings, the more you contribute to the CPP. And the more you contribute, the more you’ll receive. Moreover, your CPP excludes up to 8 years of your lowest income earnings. This significantly increases your average lifetime salary when calculating your CPP payments.
Looking for ways to increase your income? Try adding a passive income source.
How Do CPP Contributions Work?
The maximum amount you can contribute is dependent on the Yearly Maximum Pensionable Earnings (YMPE). The YMPE is used as a measure to determine how much you can contribute to your CPP each year. The contribution rate is split equally between your employer and yourself.
For 2024, the earnings ceiling is $68,500. The first $3,500 is exempt, which means your contribution to the CPP will be based on $65,000 ($68,500 – $3,500).
The current contribution rate is 5.95% for employees and employers, and for self-employed, the contribution rate is $11.9%. That means the estimated maximum annual contribution for 2024 is $3,867.50 for workers and $7,735 for the self-employed.
Contributions are made until you’re 70, so long as you’re working. However, you can elect to opt out at 65.
CCP2 Contributions
Before 2019, employees contributed 4.95% on earnings between $3,500 and the annual earnings limit to the CPP, and employers matched these contributions. Since then, the CPP enhancement was introduced, which gradually increases the contribution rate over 7 years in two steps:
- First additional component: From 2019 to 2023, the first contribution rate increase of 1% took effect for employees, bumping the rate from 4.95% to 5.95%. The self-employed rate went from 10.2% to 11.9%.
- Second additional component: Starting in 2024, earnings between $68,500 and $73,200 will be subject to CCP2 contributions. The contribution rate under CPP2 is 4.00% for workers and 8.00% for self-employed individuals.
Until 2019, the CPP retirement pension replaced 25% of your average earnings. The CPP enhancement means that your CPP will increase to replace 33.33% of your average earnings received after 2019. The exact amount that your pension will increase will be determined by the length of time and the amount that you contribute to the enhanced CPP.
Can I Receive CPP While Working?
Those who are 60 years old and choose to continue working can still receive their CPP payments. Working while receiving the benefit will not negatively affect the amount you receive. Instead, it can help you increase your benefit amount when you do retire.
You can stop making post-retirement contributions when you turn 65. Your CPP contributions will stop once you turn 70, even if you continue to work.
Other Factors That Can Affect Your CPP Payments
Certain life situations can impact the amount you will receive when your CPP benefits kick in:
- Working while collecting CPP – You can increase your CPP payments by making contributions to the CPP until the age of 70 under the CPP Post-Retirement Benefit. Every year you wait after 65, your payment will increase by 7.2% per year, up to a maximum of 42%, as mentioned. However, it’s recommended that you don’t wait past 70 years of age to collect, as there are no more increases to the CPP after this age.
- Raising children – Your CPP benefits may increase depending on your earnings when you are caring for your children under the age of 7.
- Disabilities – If you receive CPP disability payments, it will not be included in the calculation of the base component of a CPP benefit. This can help increase your CPP retirement pension.
- Pension sharing – You can share your pension with your spouse or common-law partner, which lowers your taxes in retirement by decreasing your taxable income.
- Divorce/separation – Your CPP contributions can be split equally with your spouse or common-law partner if you separate or divorce.
Are My CPP Payments Taxable?
Yes, your CPP payments are taxable. Your payments count as income, so you must report these earnings when you file your income taxes every year. Once you start collecting CPP payments, you’ll need to pay taxes on them.
The income tax rate that you would pay on your CPP income depends on your total taxable income in the tax year. Your CPP payments would be included in your overall income. Income tax rates include a federal and provincial component. So, the tax rate that you would pay would depend on where you live in Canada.
Bottom Line
If you’ve made at least one contribution to the CPP and are at least 60 years old, you’ll be eligible for the CPP. These benefits will provide you with monthly payments for the rest of your life. How much you can receive depends on several factors, including when you started to collect CPP, if you’re working while collecting CPP, and your average annual earnings over your lifetime.
