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CPP contributions: How much CPP will I receive when I retire?
The Canada Pension Plan (CPP) is a government program designed to help fund your post-working years. While this retirement benefit alone likely isn’t enough to maintain your desired lifestyle in retirement, it can provide a complementary income stream to your other savings.
- CPP contributions start when you enter the workforce, with the standard age to collect CPP being 65; delaying until 70 increases benefits.
- Maximize contributions during working years, delay payments past age 65 for higher monthly benefits, and combine CPP with other income sources for financial flexibility.
- The maximum employee contribution rate in 2025 is 5.95% on earnings up to $71,300, with an additional 4% contribution on earnings between $71,300 and $81,200. Self-employed individuals pay both employee and employer portions.
Learn how CPP works and what you need to know when it’s time to collect your benefits.
Frequently asked questions
How does CPP work?
The CPP is a social insurance program designed to enhance the income of retired Canadians and those living with disabilities. Almost as soon you enter the workforce, you start to contribute to it through mandatory automatic deductions from your paycheque. The standard age to collect CPP is age 65, although if you’re willing to accept smaller monthly payments you can start receiving the benefit as early as age 60. But as a rule, the longer you delay collecting CPP, the larger your monthly payments.
If you hold off until age 70, the last year you can delay receiving your CPP and see an increase in your benefit, then your monthly payments will increase by 0.7% a month. That translates to a 42% higher benefit than you would have received if you started getting cheques at 65. Taking CPP earlier than 65, on the other hand, reduces your benefits by 0.6% a month, or by up to 36% if you start to collect your CPP at 60.*
Who contributes to CPP?
If you are at least 18 years old, earn more than $3,500 per year and work in Canada (but outside Quebec, which has its own pension program), you are likely already contributing. That applies to self-employed Canadians, too. Otherwise, the only way you’re not contributing to CPP is if you continue working past age 70.
What is the maximum CPP contribution for 2025?
The maximum CPP contribution rate for employees in 2025 is 5.95% on earnings that fall between the basic exemption amount of $3,500 and the yearly maximum pensionable earnings (YMPE) of $71,300. Employees earning the same amount as the YMPE will pay a maximum of $4,034.10 in standard CPP contributions in 2025. Employers are required to match this amount, resulting in a combined total contribution of $8,068.20.
In addition to the standard CPP, there’s now a second earnings ceiling called the yearly additional maximum pensionable earnings (YAMPE), which is $81,200 for 2025. If you have income that falls between the YMPE ($71,300) and YAMPE ($81,200), you’ll be required to pay an extra 4% on those earnings – up to a maximum of $396 – which your employer must also match, resulting in a combined total contribution of $792.
Based on these two calculations, the maximum combined CPP contribution for 2025 is $8,860.20 per employee and employer. Self-employed individuals must cover both the employee and employer portions themselves.
How do I benefit from contributing to CPP?
Your CPP contributions are tied to your income, meaning the more you earn, the more significant your benefits become when you retire. As a regular contributor, you may qualify for any of the following at some point in your life.
| Retirement pension | This is a monthly benefit you can begin receiving once you turn 60, provided you have made at least one eligible contribution during your working years. These payments do not begin automatically; you must apply once you are ready to receive them. |
| Post-retirement benefits | Even if you continue working past the age of 60 and opt to start receiving your CPP, you are required to keep contributing until age 65. After you turn 65, contributions are optional but can further enhance your post-retirement benefits. |
| Disability benefits | The CPP provides support for Canadians under 65 who have contributed to the program and have a severe long-term disability that prevents them from working. CPP rules also exclude periods of disability from your contribution calculations to avoid reducing your retirement benefits. If you were receiving CPP disability at the time of your death or had sufficient contributions, your dependent children may qualify for benefits. |
| Survivor benefits | The program also provides a monthly pension for a surviving spouse or common-law partner, benefits for dependent children and a one-time death benefit of $2,500. As of January 1, 2025, there is a possible top-up of the death benefit to $5,000 if the deceased individual never received a CPP payment and there is no surviving spouse or common-law partner to receive the survivor’s pension. Including these benefits in your estate planning can help ensure your loved ones are financially supported. |
How much money can I expect to receive?
In January 2025, the maximum monthly CPP retirement pension for individuals starting their pension at age 65 was $1,433. As of October 2024, the average monthly payment for new CPP recipients starting at age 65 was $808.14. Your situation will determine how much you’ll receive up to the maximum.
How can I maximize my CPP benefits?
There are a few ways you can increase the benefits you’ll eventually receive from CPP and make them last as long as possible.
| Maximize your contributions | Boost your future payouts by consistently contributing the maximum allowable amount during your working years. This requires earning at or above the YMPE threshold. |
| Delay your start date | Postponing your payments beyond the age of 65 can considerably increase your monthly benefit; applying before age 65 decreases it. |
| Balance your income sources | If you’re able to combine your CPP benefits with other retirement income, such as personal savings, investments and other pension plans, you’ll enjoy greater financial flexibility in retirement and may not need to start drawing on CPP as soon as you’re eligible. |
