Canada Pension Plan (CPP) guide

What CPP is

The Canada Pension Plan is a contributory, earnings-related pension. Almost every worker in Canada outside Quebec contributes on earnings between a basic exemption of $3,500 and the year's maximum pensionable earnings (YMPE), which is $74,600 in 2026. Quebec workers contribute to the Quebec Pension Plan instead, run by Retraite Québec.

Your retirement pension depends on how much and how long you contributed. It's paid for life, it's indexed to inflation each January, and it's taxable income. You must apply for it — it doesn't start automatically.

2026 contribution figures

Employers match employee contributions. Self-employed people pay both shares — 11.9% up to the YMPE and 8% on CPP2 earnings — which is why CPP matters so much in a self-employed budget. See retirement planning for the self-employed.

How the pension is calculated

In broad terms, the base CPP replaces 25% of your average pensionable earnings, adjusted to today's wage levels, after dropping out some of your lowest-earning years (the general drop-out removes 17% of your contributory months, and there are child-rearing and disability drop-outs). The enhancement that began in 2019 gradually raises the replacement toward 33.33% for people who contribute fully over a career under the enhanced rules.

The exact formula is complex, which is why Service Canada's Statement of Contributions — available in My Service Canada Account — is the best starting point. It shows your estimated pension at 65 based on contributions so far. How CPP is calculated walks through the pieces.

Choosing when to start: 60 to 70

You can start your pension any month from 60 to 70. It's reduced by 0.6% for each month before 65 (36% at 60) and increased by 0.7% for each month after 65 (42% at 70). The change is permanent. The table below applies those rules to an estimate of $1,000 a month at 65.

Working while receiving CPP

You can receive CPP and keep working. If you're under 65, contributions on your earnings are required; between 65 and 70 you can elect to stop contributing. Contributions made while receiving CPP build a post-retirement benefit, a small lifetime top-up (up to $54.69 a month for one year's maximum contributions in 2026).

Survivors, sharing and splitting

• A surviving spouse or common-law partner may receive a survivor's pension: in 2026 the maximum is $803.54 a month under 65 and $904.59 at 65 and over, subject to combined-benefit limits. A one-time death benefit of up to $2,500 may also be payable.
• Spouses can apply to share their CPP retirement pensions, which can lower the household's tax when incomes differ. This is separate from pension income splitting, which doesn't apply to CPP. See CPP sharing between spouses.
• After a separation, CPP credits earned during the relationship can be divided (credit splitting).

Applying

Apply online through My Service Canada Account or with a paper form, ideally several months before you want payments to start. If you're 70 or older and haven't applied, apply right away — there's no increase for waiting past 70 and only limited retroactive payments.