For most Canadian retirees, careful financial management is a necessity. Most live on an annual income which is less than that which they enjoyed during their working years, and opportunities to increase that income in any significant way are limited. As well, in recent years, inflation (especially with respect to food and shelter costs) has meant that more and more of that income must be allocated to necessities.
As of 2024, there are two contribution levels for the Canada Pension Plan (CPP). Income amounts and employee contribution percentages for 2025 for each contribution level are as follows.
No one likes paying taxes, but for taxpayers who live on a fixed income having to pay a a large tax bill can mean real financial hardship – and the majority of Canadians who live on fixed incomes are, of course, those who are over 65 and retired.
Changes made to the Canada Pension Plan (CPP) beginning in the 2024 calendar year will create a two-tier contribution structure.
Everyone in Canada who earns a salary or wages is familiar with the deduction taken from each paycheque for contributions to the Canada Pension Plan (CPP). The CPP is one of the two major government-sponsored retirement income programs in Canada – the other being the Old Age Security program.
The Canada Pension Plan contribution rate for 2023 is set at 5.95% of pensionable earnings for the year.
The Canada Pension Plan contribution rate for 2022 is set at 5.7% of pensionable earnings for the year.
