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In Canada, there are three pillars of support in the retirement system. These pillars work in unison to provide you with an income throughout your retirement. These three pillars are: 

Canadians who have retired from the workforce rely on certain government-administered programs such as the Canada Pension Plan (CPP). Many retirees use this program as their base income and top it off with their retirement savings or their employment-based pension plans. While the CPP payments are a form of guaranteed income, it’s important to know when you’ll get these payments and how much you’ll receive to properly budget. 

CPP Payment Dates Schedule 2024

January 29, 2024
February 27, 2024
March 26, 2024
April 26, 2024
May 29, 2024
June 26, 2024
July 26, 2024
August 28, 2024
September 25, 2024
October 29, 2024
November 27, 2024
December 20, 2024

What Is the Canada Pension Plan?

The Canada Pension Plan (CPP) was first introduced in 1995 as a measure to decrease the rise in poverty among retirees. It is a taxable benefit that replaces some of your income when you retire. To be exact, the CCP payment is meant to provide a quarter of your average lifetime salary. 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.

Check out what is the CPP death benefit.

Who’s Eligible For CPP?

To be eligible for a CPP retirement pension, you must be at least 60 years old and have made at least one valid contribution to the CPP. 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. Contributions are made until you’re 70, so long as you’re working, however, you can elect to opt-out at 65.

Note: if you live in Quebec you’ll be under a different program called the Quebec Pension Plan (QPP).

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 affect the amount you receive, however, if you choose to postpone your CCP payment, you can increase the amount you receive. 

Find more tax benefits for seniors.

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

Depending on the age you decide to collect your CPP payments, the amount you receive will differ. If you choose to start collecting your payments at 60 years old (the earliest you can start), you’ll receive 36% less than if you had started 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%. 

Do you have a low income? Check out these tax tips for low income earners.

The Amount You Contributed To The CPP 

If you put more into the CPP when you were working, you will receive larger CPP payments when you decide to start collecting CPP. 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. 

If you are self-employed, you are responsible for the full contribution rate of 11.9 %. The contribution is based on net income after business expenses. If you have contributed under or more than the set minimum, you will be refunded when filing your income taxes.

CCP2 Contributions

Before 2019, employees contributed 4.95% on earnings between $3,500 and an annual earnings limit to the CPP, and employers matched these contributions. With the CPP enhancement, the contribution rate will gradually increase over seven 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 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. That means the maximum you’ll contribute is $188 as a worker and $376 as a self employed individual. 

Find out how much you can contribute to your RRSP.

The Time You Contributed to the CPP 

The longer you contribute to the CPP, the more you will receive when you decide to start collecting it. To receive the maximum CPP amount, you’ll need to contribute to your CPP for at least 39 of your 47 working years (18 – 65 years old). 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.

Learn how to avoid the Old Age Security (OAS) clawback.

Your Average Earnings Throughout Your Working Life

The higher your average earnings, the more you contributed to the CPP, so the more you will 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.

Other Factors That Can Affect Your CPP Payment

  • If you’re 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%. It’s recommended that you don’t wait past 70 to collect as there are no more increases to the CPP after 70. 
  • Periods of raising children  – Your CPP benefits may increase depending on your earnings when you were caring for your children under the age of 7.
  • Disability – If you receive a CPP disability payment, 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.

CPP Enhancement Contribution Rate In 2023

Employee and Employer Contribution Rate SplitSelf- Employed Contribution Rate Earnings Ceiling EstimationEmployee and Employer Maximum Yearly Contribution EstimationSelf-Employed Maximum Yearly Contribution Estimation
If your earnings rise above the earning’s ceiling, your CPP contribution rate may change. Rates will not change if you earn less than the earnings ceiling.

How Do You Apply For The CPP Benefit? 

You can choose to 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 (MSCA). When applying online you’ll be able to choose when you want your payments to start and you’ll be able to 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. 

Maximum CPP Pension Benefits 2023

Pensions and BenefitsMaximum Benefit Payment Amounts 2023
Canada Pension Plan (CPP) at age 65$1,306.57
Canada Pension Plan (CPP) Disability Benefit$1,538.67
Canada Pension Plan (CPP) children of disabled benefit$281.72
Canada Pension Plan (CPP) children of deceased benefit$281.72
Canada Pension Plan Post Retirement Benefit (PRB) at age 65$40.25
Canada Pension Plan Post Retirement Benefit (PRB) Disability Benefit at age 65$558.74
Survivor’s pension$783.94 
One-time death benefit payment $2,500.00

Other Benefits Under The 2023 CPP 

Combined BenefitsAverage amount for new beneficiaries (October 2022)Maximum payment amount (2023)
Pensionable earnings for combined survivors and retirement (at age 65)$914.53$1,313.13
Pensionable earnings for combined disability and retirement (at age 65)$1,158.95$1,542.77

Bottom Line

If you’ve applied to collect the CPP, you will receive monthly payments for the rest of your life. You have to be above the age of 65 and have made at least one valid contribution to the CPP to collect it. 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.

Frequently Asked Questions

What’s the maximum and average amount you can get?

The maximum amount you can get starting at age 65 is $1,203.75 monthly. The average amount you can get is $614.21 monthly. 

Is my CPP payment taxable?

Yes, your CPP payment is taxable.

What’s the difference between CPP and QPP?

The Québec Pension Plan (QPP) is for people who have worked in Quebec and are either living in Quebec or are living outside of Canada, with your last province of residence being Quebec.

Do CPP payments increase every year?

CPP payments increase every year. Rate increases are calculated annually using the Consumer Price Index All-Items Index, and they come into effect each January.

Can you receive CPP while working?

Yes, you can receive CPP while working. Your pension amount can even be increased using the CPP post-retirement benefit, where you contribute to the CPP while you work until age 70. At this age, your CPP contributions stop, even if you’re still working. 

What is the CPP enhancement?

The CPP enhancement allows higher income earners to contribute more to the CPP, and eventually receive a higher pension payout as a result. The enhancement is being phased in over seven years. Once fully implemented, it could increase the maximum CPP retirement pension by as much as 50% for younger income earners
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.
Matthew Taylor avatar on Loans Canada
Matthew Taylor

Matthew joined the Loans Canada writing team in 2021 while was finishing up a Bachelor's degree at the University of Saskatchewan. It was there that he discovered his love of writing. His work has appeared in several publications, including the Canadian Student Review and In his spare time, Matthew enjoys reading, geocaching, and spending time with his family and pets.

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