Canada Pension Plan (CPP): How It Works, Amounts and When to Start

The Canada Pension Plan (CPP) retirement pension is a monthly, taxable benefit that replaces part of your income when you retire. You contribute to the CPP if you are over 18, work in Canada outside Quebec and earn more than $3,500 a year. Besides the retirement pension, the CPP pays a disability benefit, a survivor’s pension, a children’s benefit and a one-time death benefit. Quebec has its own plan, the Quebec Pension Plan (QPP). This page summarises how the CPP works and points to the guide on each part.

The CPP at a glance

Sources: ESDC, CPP maximum monthly amounts; Service Canada, CPP payment amounts; CRA, CPP contribution rates.

Because the CPP enhancement is still being phased in, the maximum for a new pension rises a little each month: $1,524.78 for a pension starting in December 2026. The maximum CPP payment page explains who gets the maximum and why most people don’t.

How your pension is worked out

Three things set your retirement pension: your earnings each year up to the maximum pensionable earnings (the YMPE, $74,600 in 2026), how many years you contributed between 18 and the start of your pension, and the age you start. Up to 8 of your lowest-earning years are dropped from the base part of the calculation, and periods spent caring for a child under 7 or receiving the CPP disability benefit are protected too. Why your CPP may be less than you expected goes through the calculation, and the CPP calculator estimates your own pension. Your record of earnings is on your Statement of Contributions.

When to start

You can start the CPP retirement pension any time from 60 to 70 (65 is the standard age): it is 0.6% lower for each month before 65 (up to 36% less at 60) and 0.7% higher for each month after (up to 42% more at 70), with no gain from waiting past 70; applying after 65, you can backdate the start up to 11 months, but not before the month after your 65th birthday. The trade-offs, breakeven ages and a comparison by start age are in CPP at 60 vs 65 vs 70; delaying CPP until 70 covers deferring past 65. If you keep working after your pension starts, contributions can earn a post-retirement benefit.

Contributions

Employees and employers each pay the same rate, and self-employed people pay both shares. Since 2024 a second tier, CPP2, applies to earnings between the first and second earnings ceilings. The details are in:

• CPP contribution rates: this year’s rates, ceilings and maximum contributions, with a calculator for your own pay
• CPP enhancement and CPP2: what the enhancement adds to contributions and to future pensions
• CPP for the self-employed: paying both halves, and what you can deduct
• Your CPP Statement of Contributions: how to get it and what to check

Other CPP benefits

• Disability. A monthly benefit if a severe and prolonged disability stops you from working regularly at any job. See the CPP disability benefit and working while on CPP disability.
• Survivors. A monthly pension for a surviving spouse or common-law partner, and a benefit for dependent children: CPP survivor benefits.
• Death benefit. A one-time payment to the estate: CPP death benefit.
• Sharing with a spouse. Couples who both receive CPP can share their pensions, which may lower the tax the household pays: CPP pension sharing.

CPP with your other income

The CPP pension is taxable income (is CPP taxable?). It is paid once a month on set dates (CPP payment dates), and the first payment can take time after you apply (how long the first payment takes). You can also get Old Age Security from 65; CPP vs OAS compares the two, and living on CPP, OAS and GIS shows what the public pensions add up to on their own.