Changes made to the Canada Pension Plan (CPP) beginning in the 2024 calendar year will create a two-tier contribution structure.
CPP Archives - Akler Browning LLP
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.
One or two generations ago, retirement was an event. Typically, an individual would leave the work force completely at age 65, and begin collecting Canada Pension Plan and Old Age Security benefits along with, in many cases, a pension from an employer-sponsored registered pension plan.
The Canada Pension Plan contribution rate for 2021 is set at 5.45% of pensionable earnings for the year.
When the Canada Pension Plan was introduced in 1965, it was a relatively simple retirement savings model. Working Canadians started making contributions to the CPP when they turned 18 years of age and continued making those contributions throughout their working life.
A generation ago, retirement was an event. Typically, an individual would leave the work force completely at age 65 and begin collecting Canada Pension Plan and Old Age Security benefits along with, in many cases, a pension from an employer-sponsored registered pension plan.