Canada Pension Plan (CPP)
The Canada Pension Plan is the retirement income you build with every paycheque — what you pay in, what you’ll get out, when it lands in your account, and how much starting at 60 instead of 65 really costs you.
Last updated: July 2026 · Service Canada · Canada Revenue Agency · 2026 amounts
What is the Canada Pension Plan?
The Canada Pension Plan is a mandatory contributory pension that covers virtually every worker in the country outside Quebec, which runs its own parallel plan (the QPP). If you’re employed, 5.95% comes off your pensionable earnings between the $3,500 basic exemption and the $74,600 ceiling, and your employer quietly matches every dollar. Earn above that ceiling and a second contribution called CPP2 takes 4% of earnings between $74,600 and $85,000. Self-employed workers pay both halves themselves, which is why their maximum is exactly double an employee’s. Those contributions aren’t a tax — they buy you a monthly, inflation-indexed pension that keeps paying for as long as you live, plus disability, survivor and children’s benefits along the way.
What you eventually receive depends on three things: how much you earned, how long you contributed, and — the part most people underestimate — what age you start. The standard age is 65, but you can begin as early as 60 or wait as late as 70. Every month before 65 shaves 0.6% off your pension permanently (a 36% cut at 60), and every month after 65 adds 0.7% permanently (a 42% raise at 70). In 2026 the maximum retirement pension at 65 is $1,507.65 a month, but the average new beneficiary actually receives $877.01 — a gap worth understanding before you assume the maximum is your number. There is no advantage to waiting past 70; the increase stops there.
CPP 2026 Key Rates
| Item | 2026 |
|---|---|
| Employee contribution rate | 5.95% |
| Maximum pensionable earnings (YMPE) | $74,600 |
| Basic exemption | $3,500 |
| Maximum employee contribution | $4,230.45 |
| CPP2 rate (on $74,600–$85,000) | 4% |
| Maximum CPP2 contribution | $416 |
| Self-employed maximum (CPP $8,460.90 + CPP2 $832) | $9,292.90 |
| Maximum monthly pension at 65 | $1,507.65 |
| Average monthly pension at 65 | $877.01 |
| Starting early (age 60) | −0.6% per month (−36%) |
| Starting late (age 70) | +0.7% per month (+42%) |
Contribution rates and ceilings are set by the Canada Revenue Agency and change every January. Payment amounts come from Service Canada: the maximum shown is for a pension starting in January 2026, and the average is for new beneficiaries as of April 2026. If you contributed to the Québec Pension Plan instead, your rates and amounts are set by Retraite Québec, not by these figures.
What You’ll Find in This Section
- CPP Retirement Pension Calculator: enter your estimated pension and your start age to see exactly what starting at 60, 65 or 70 pays you each month — and the break-even age between them
- CPP Payment Dates Table: every 2026 deposit date, plus the maximum and average monthly amount for each CPP benefit
- CPP Contribution Rates Table: the full contribution picture — rates, ceilings, exemption, CPP2 and self-employed maximums
- How to Apply: what you need before you start, the two ways to apply, how long it takes, and what to do if something goes wrong
- Complete guide: how CPP is calculated, what the enhancement changed, and the provisions that can raise your pension
Also in Canada:
- Take-Home Pay — what actually lands in your account each payday
- Net Pay Calculator — your salary after tax, CPP and EI, in any province
- Tax Brackets Table — federal plus all 13 provinces and territories
📋 Rates verified — Official sources: CRA — CPP contribution rates, maximums and exemptions · CRA — CPP2 rates and maximums · Service Canada — CPP monthly payment amounts
⚠️ This is general information, not financial, tax or legal advice. KnowMyGovt is an independent service with no affiliation with or endorsement by Service Canada, the Canada Revenue Agency or the Government of Canada, and is not responsible for decisions you make based on it.
