What is the Canada Pension Plan (CPP)?
The Canada Pension Plan (CPP) is an earnings-related social insurance program that provides basic benefits when a contributor to the plan retires or becomes disabled. It provides three kinds of benefits:
- Retirement pension
- Disability benefits (for contributors with a disability and their dependent children)
- Survivor benefits (including the death benefit, the survivor's pension, and the children's benefit)
What is the Québec Pension Plan (QPP)?
The Québec Pension Plan (QPP) is a compulsory public insurance plan. It provides people who work or have worked in Québec and their families with basic financial protection in the event of retirement, death or disability.
The QPP is financed by contributions from Québec workers and employers. These contributions are collected by the Agence du Revenu du Québec (ARQ) and are managed by the Caisse de dépôt et placement du Québec.
The QPP provides three types of benefits:
- Retirement pension
- Disability benefits
- Survivors' benefits
An overview of CPP enhancement benefits
Once fully in place in 2064, the CPP enhancement will increase the maximum CPP retirement benefit by about 50 percent. The current maximum benefit is $15,679. Today, the enhanced CPP represents an increase of nearly $8,000, to a maximum benefit of nearly $23,832.
Enhanced benefits will accumulate gradually as individuals pay into the enhanced CPP. Young Canadians just entering the workforce will see the largest increase in benefits. Canada Pension Plan income replacement levels will go from replacing 25% of a worker's pensionable earnings to 33%.
To fund these enhanced benefits, annual CPP contributions have increased modestly and will continue to increase until 2025.
2024 CPP & QPP Amounts
The following table outlines the 2023 contribution rates, maximums and exemptions for CPP and QPP:
Enhanced Canada Pension Plan (eCPP) & Québec Pension Plan (eQPP)
For more information, see our post on everything you need to know about the CPP enhancement.
Additional Resources
- For more information, check out the CRA’s list of CPP contribution rates, maximums and exemptions.
- See the CRA’s Benefits and Allowances Chart to see which taxable allowances and benefits you need to deduct CPP from.
- For more information on the legislative changes to the CPP effective January 1, 2012, see the NPI’s Canada Pension Plan Changes Payroll Best Practices Guidelines.
- Is your employee subject to the CPP changes of Bill C-51? Find out with the NPI’s free CPP Decision Tool.
Disclaimer: The information provided in this guide is for informational purposes only. It is not professional financial or legal advice nor is it intended to be a substitute therefore. Where there are discrepancies between the guide and information provided by the federal government, provincial government, or the Canadian Revenue Agency (CRA) or Revenu Québec, defer to the guidelines provided by the governing agencies.