Canada Pension Plan (CPP) Contributions

The Canada Pension Plan (CPP) retirement pension is a monthly paid benefit that replaces part of your income when you retire. Employees and employers contribute to CPP.

  • Contributions to CPP are compulsory for all working Canadians aged 18-70. Employees and employers contribute equally on earnings that are between the Basic Exemption amount and the Year's Maximum Pensionable Earnings (YMPE). In 2023, contributions on those earnings are 5.95% by employees and 5.95% by employers.
  • If you earn more than the Year's Maximum Pensionable Earnings, your contributions and those by Western to CPP on your behalf will cease once the limit is reached each year. The following January, CPP contributions will begin again. This means you may see a noticeable increase in your pay when CPP deductions cease during a year, and then you may see a noticeable decrease in your pay at the beginning of the following year when deductions begin again.
  • Non-residents working in Canada are required to make contributions.
  • To be eligible to begin receiving CPP, you must be at least 60 years of age, and have made at least one contribution to CPP. The amount of CPP you will receive depends on your personal contribution history.
  • Canadians aged 65-70 AND in receipt of CPP benefits may elect to cease contributions by filing Form CPT30. Read more about CPP contributions for those collecting CPP between age 60-70.
Year Year's Max. Pensionable Earnings (YMPE) Basic personal exemption amount Max. contributory earnings Employee & employer contribution rate  Max. annual employee contribution Max. annual employer contribution
2023 $66,000 $3,500 $63,100 5.95% $3,754.45 $3,754.45
2022 $64,900 $3,500 $61,400 5.70% $3,499.80 $3,499.80
2021 $61,600 $3,500 $58,100    5.45% $3,166.45 $3,166.45
2020 $58,700 $3,500 $55,200 5.25% $2,898.00 $2,898.00
2019 $57,400 $3,500 $55,900 5.1% $2748.90 2,748.90

Learn more about CPP from the Canadian Government:

CPP Enhancement

Starting in 2019, CPP payments to retirees began to gradually increase. CPP contributions (the deduction from your pay) also increased, so that higher benefits will be available when you retire. The CPP enhancements, being implemented over seven years in two steps, will increase the maximum CPP pension by as much as 50% for those who make enhanced contributions for 40 years!

Step 1 - 2019 to 2023: From 2019 to 2023, the contribution rate for employees is increasing by a total of one percentage point (from 4.95% to 5.95%) on earnings between $3,500 and the YPME set for 2019. (See table above)

Step 2 - 2025 to 2025 - Starting in 2024, a second, higher earnings limit will be introduced. This new limit, known as the year’s additional maximum pensionable earnings, will not replace the first earnings ceiling. Instead, it will subject your earnings to two earnings limits. This limit is referred to as the second earnings ceiling. This change will require you to contribute 4% of earnings between the YMPE and AYMPE to the CPP. These contributions are also mandatory.

Note: The additional range of earnings covered by the plan will only affect you in years when your annual earnings are above the first earnings ceiling.

Read more about the CPP Enhancement

CPP contributions for those age 60 to 70

Changes instituted to the Canada Pension Plan (CPP) on January 1, 2012 by the Canada Revenue Agency may affect you.  The changes affect only those aged 60 to 70 who work and receive a CPP/QPP retirement pension.

  • Employees aged 60 to 65 and receiving a CPP retirement pension must make CPP contributions. Western automatically deducts these contributions from your pay.
  • Employees aged 65 to 70 and receiving a CPP retirement pension have the option to make CPP contributions.  Western will automatically deduct CPP contributions unless you “opt-out” by completing Form CPT30. File the original form with the Canada Revenue Agency and provide a copy to Western Payroll. Forms may be sent by mail to: Western University, Human Resources (Payroll) Support Services Building Room 4159, London ON N6A 3K7 or by fax to Human Resources (Payroll) at 519-661-4104.SSB Room 4159(see Important Note below).  For additional information on required documentation, please see page two of Form CPT30, under the heading “Information about stopping to contribute to the Canada Pension Plan”.

If you elect not to make CPP contributions, but then wish to restart CPP contributions in the future, a new CPT30 form may be filed to revoke a previous election to change your contribution status at that time. The CPT30 form can only be used once per calendar year.

Important Note - If you are opting out of CPP contributions, along with a copy of Form CPT30, you will need to provide Western Payroll with proof of your age and proof you are in receipt of CPP.  To provide proof you are in receipt of CPP, you may provide one of the following:

  • letter or notice from the government confirming you are receiving CPP
  • a T4A tax slip for your CPP payments
  • a CPP payment statement from your ‘My Service Canada’ account that shows amounts of payments made to you

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