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Unless you live in Quebec, which has its own Quebec Pension Plan (QPP), if you’ve made more than $3,500 a year, you’ve paid into the CPP (and so has your employer, at a very generous — if government-mandated — 50% share). Once you hit 60, you can start collecting your pension payments. Depending on your financial situation, however, you may not want to get your CPP payments right away. That’s because, for every year you wait, your CPP payout increases. You reach the maximum amount when you hit 70, so if you can make it that long, it’s often best to wait.

CPP payments are made near the end of every month. For 2023, those dates are:

As for how much your CPP payment will be, that depends on two main factors: how much you earned and how old you are when you begin taking your pension.

In 2023, employees over the age of 18 who earn more than $3,500 per year must pay CPP. (As we mentioned above, if you live in Quebec you'll pay into the QPP, which has a slightly higher rate.) CPP contributions are split equally between employer and employee, based on the employee’s income up to a maximum set by the federal government. If you make more than $66,600 in 2023, you’ll contribute the maximum amount to CPP.

To receive the maximum CPP payment, you need to have made the max CPP contribution each year for at least 39 years. The maximum employee contribution changes each year; in 2023 it is $3,754.45, or 5.95% of your salary (less a $3,500 exemption), whichever is more. For self-employed people — who pay both the employer and employee contributions — the maximum CPP contribution is $7,508.90.

In 2023, the maximum CPP payout is $1,306.57 per month for new beneficiaries who start receiving CPP at 65. Although the max CPP payout is substantial, not everyone gets it. The average CPP in October 2022 was a much lower $717.15 per month, after all. This is because not all people have contributed enough over their lifetimes to receive the full CPP payment.

The amount of CPP you receive each month upon retirement is based on your contributions during your working life. The way CPP works is very simple. When you contribute to the Canadian Pension Plan, your money goes into a fund that’s used to pay out CPP in your retirement.

The CPP payments you receive can be shared with a lower-income spouse or partner. They can be split in the case of relationship breakdown, and if one spouse or partner was out of the workforce, or worked part time, there is a provision for “child rearing” that will exclude the lower earning years from the CPP payment calculation, effectively increasing the CPP payment you can receive. CPP is considered income and fully taxable at your marginal tax rate. To avoid a big tax shock at the end of the year, you can request that income tax be deducted from each payment.

You can start taking CPP at age 60, but you will lose up to 36% of your pension permanently if you take it that early. This is because CPP payments are reduced by 0.6% for every month before your 65th birthday you start taking your CPP. If you started on your 60th birthday, that would mean a reduction of 7.2% per year (12 months/year x 0.6% per month), which can be a substantial amount of money.

Conversely, if you delay receiving your CPP until age 70, your payments will be permanently increased by 0.7% for every month after your 65th birthday you delay, or 8.4% per year. That means if you delay CPP until age 70, you will receive 42% more than someone who starts taking payments at 60. Despite those numbers, most people start receiving CPP the month after their 65th birthday. And no, you can’t just keep waiting and pumping up your payments. There’s no further increase after age 70.

Your CPP pension amount is based on how much you contributed and how long you paid CPP. There is a “general drop-out” provision that excludes certain months with low earnings, and if you were out of the workforce for a number of years due to child care duties, or you worked part time, you can request a “child rearing” consideration. You can get more information here.

The average CPP payment for beneficiaries who receive their first payment at 65 years old as of October 2022 is $717.15, as mentioned above. Of course, there are other scenarios possible, such as survivor or disability benefits.

As we mentioned before, to receive the maximum CPP, you would have to be making the maximum CPP contribution for 40 years. The federal government sets the Year’s Maximum Pensionable Earnings (YMPE) every year. That number is the basis for both CPP and pension contributions. In 2023, the YMPE is $66,600. Here's a helpful chart:

Old Age Security (OAS) is a pension given to Canadians over 65. The amount you receive each month is determined by how long you have lived in Canada after the age of 18. Payments are based on your marital status and level of income, and the maximums are calculated quarterly. The maximum monthly OAS for the first quarter of 2023 is $687.56 for people 65-74 years old and $756.32 if you're 75 or older.

Guaranteed Income Supplement (GIS) provides a monthly non-taxable top-up to Old Age Security. GIS is income-tested. The next year’s payment will be calculated based on the net individual or family income reported on your income tax return. You can get more information on GIS here.

You must apply for CPP. It does not start automatically. To qualify for CPP, you must:

Service Canada can automatically enroll some people in OAS, but not others. They’ll let you know if you’ve been automatically enrolled. Otherwise you’ll have to do it yourself (here’s the site). Unlike CPP, OAS is completely funded by the federal government, and you do not pay into it directly.

To qualify for OAS, you must:

You can receive the maximum OAS payment if you’ve lived in Canada for at least 40 of the 47 years between your 18th and 65th birthday.

OAS is considered income and is fully taxable at your marginal tax rate. OAS is income-tested, which basically means the government is watching you. If you make more than a certain amount of income in a year, the CRA is coming for its money. (Your OAS distributions will be reduced, or “clawed-back.”) If your income is more than $129,757, congratulations: you do not qualify to receive OAS.

Based on the most recent figures, if you're over 75 and you receive the average CPP payment plus the maximum OAS, you will receive $1,473.47 per month. That’s $17,681.64 per year, before taxes. If these means of public retirement income are your only sources of income, then you may also qualify for some GIS. You can get an estimate of how much you might need to retire by using our free retirement calculator. The calculator will also tell you if you’re saving enough for retirement or if you should aim to put away a little more money.

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• We have made a review the c-suite titles.
• CCO can have 2 meanings.
• CEO – Chief Executive Officer.
• CFO – Chief Financial Officer.
• CHRO – Chief Human Resources Officer.
• CINO – Chief Innovation Officer.
• CIO – Chief Information Officer.
• CMO – Chief Marketing Officer.