CPP

Plain meaning

A public pension program funded through contributions by employees, employers, and self-employed individuals.

Also called

Background

The Canada Pension Plan began in 1966. It has since been expanded, including through CPP enhancement rules that gradually increased contributions and future benefits.

Key points

• Employees and employers both make CPP contributions on pensionable earnings up to annual limits.
• Self-employed individuals generally pay both the employee and employer portions through their tax return.
• CPP retirement pension amounts depend on contributions, earnings history, and the age when benefits begin.
• CPP also includes disability, survivor, children's, and death benefits in qualifying circumstances.
• Annual contribution rates and maximum pensionable earnings are recurring payroll and tax administration items.

Why it comes up

CPP contribution rates, pension changes, and payroll rules affect workers, employers, retirees, and self-employed taxpayers.