Canada Pension Plan: How Much You’ll Get

If you are working in Canada, you could be eligible to contribute to and reap the benefits of the Canada Pension Plan (CPP).

With the CPP you make contributions over the course of your working years, and in return, when you retire, you receive a monthly, taxable benefit to replace part of the income you would normally receive from an employer.

To be eligible to receive the CPP for the remainder of your life, you must be at least 60 years old and have made at least one contribution to the plan.

Those contributions can either have been made by you while working in Canada, or can be in the form of credits received from a former spouse or common-law partner after the termination of your relationship.

Beautiful BC in the Evening

Monthly and Maximum CPP Amounts for 2021

In the table below, you can find the maximums and average CPP amounts paid out monthly from January to December 2021:

Type of pension or benefit Average amount for new beneficiaries (March 2021) Maximum payment amount (2021)
Retirement pension (at age 65) $706.57 $1,203.75
Post-retirement benefit (at age 65) $13.84 $30.09
Disability benefit $1,038.95 $1,413.66
Post-retirement disability benefit $510.85 $510.85
Survivor’s pension – younger than 65 $457.07 $650.72
Survivor’s pension – 65 and older $315.15 $722.25
Children of disabled CPP contributors $257.58 $257.58
Death benefit (one-time payment) $2,495.71 $2,500
Combined benefits
Combined survivor’s and retirement pension (at age 65) $891.66 $1,203.75
Combined survivor’s pension and disability benefit $1,114.65 $1,413.66

Source: Canada.ca

How Do I Get the Maximum CPP Amount?

If you look at the table again, you’ll notice that the maximum CPP amount is often higher than the average amount, which may have you wondering – how can I get the maximum?

To get the maximum CPP amount, you must have contributed the maximum to your CPP for at least 39 of the 47 years between the ages of 18 to 65, based on the YMPE (Yearly Maximum Pensionable Earnings) that year.

If you want to see all the YMPE amounts throughout the years along with the contribution rates, you can see them here.

The CPP employee contribution rate is a percentage set each year which is used to calculate the maximum annual employee and employer contribution amount.

In general, you need to have been earning over the YMPE for many years between the ages of 18 to 65 years old to receive the maximum payment amount.

Example

Using the number of 2021, we have a YMPE of $61,600.

If we want to contribute the maximum, we need to subtract 2021’s basic exemption, which is $35,00 from the YMPE, and it gives us $ 58,100.

Next, we multiply it by the CPP employee contribution rate, which is 5.45% for 2021 (a decently large increase in comparison to past years) and this gives us $3,166.45, which would be the maximum annual employee contribution amount for 2021.

Even if it’s too late for you to receive the maximum CPP, there are always strategies you can apply if you want to increase your CPP payments, such as deferring your payments until the age of 70.

There are also plenty of provisions that you can apply for that may increase your payments, including the childcare provision for years you were taking care of children under the age of 7, provisions for years of low or no income, provisions of disability, and the option of pension sharing.

So, it’s important to do your research and ensure you’re getting the most out of your CPP payments.

Factors that Affect CPP Amounts

There are a few different factors at play when it comes to how much CPP you will receive in each year, including:

  • How old you were when you started your pension
  • The amount and length of time you’ve contributed to your CPP
  • Your average earnings during your working life

When someone asks how much their CPP amount will be, there isn’t a cut and dry answer – it can vary a lot from person to person.

But in 2021, the maximum monthly amount is $1,203.75, and the average monthly CPP payment among retirees in June is $619.68.

Your CPP payment amount will vary based on your circumstances, and the government takes some of your personal situations into account when it comes to your CPP, such as periods where you had low to no earnings, periods where you were caring for children under the age of 7, and periods of disability.

You can read more about those considerations here.

Did You Know?

The government will automatically exclude up to 8 of your low-earning years when calculating the base amount of your CPP. This increase the amount of your overall pension.

Frequently Asked Questions

  • How do I know how much CPP I will get?
  • Do you get CPP if you never worked?

Tara Al-Khudairi is a freelance personal finance writer who has worked in the financial services industry since 2017. She graduated from McMaster University with a degree in Finance and is pursuing her CFA.

She has worked at a major Canadian financial institution in various client-facing advisory roles, starting as a bank teller and working up to a Client Services Associate within the Asset Management division. She specializes in simplifying concepts of personal finance for people of various financial backgrounds.

When she’s not examining the markets looking for the next SHOP.TO, she’s either practicing yoga, planning her next vacation, or has her nose buried deep in a book.