Everything You Need to Know About Canada Pension Plan

Canada Pension Plan (CPP) is an amazing retirement program to make lives easy.

March 2, 2022

Have you ever noticed that discussions about retirement savings bring up more questions than answers? Like, how much money do I need to pay bills every month? How much should I save? Will I have enough savings to live a comfortable life ahead? Through Canada Pension Plan (CPP), you can stop thinking about how will be your retirement life because this program is easy and straightforward to apply with maximum benefits for retired workers to support them in their difficult times. 

Defining the Canada Pension Plan (CPP)

It is a pension plan designed explicitly for Canadian retired workers to provide them with income for their retirement. Canada Pension Plan supports workers and their families to replace earnings upon retirement, disability, or death. The average monthly payment is C$614.21 for a 65 years old worker who recently retired. Except for the Quebec province, anyone in Canada can benefit from this pension plan.

FOR YOU

Register your business in Canada today

GET STARTED

Eligibility Criteria for Canada Pension Plan

FOR YOU

Register your business in Canada today

GET STARTED

Individuals are aged 60–70 years who work. At the same time, they receive a CPP retirement benefit may increase their retirement income with a post-retirement use if they continue to contribute to the CPP.

To be eligible for Canada Pension Plan (CPP), you have to meet the following requirements:

  • You must be at least 60 years old.
  • Must have made at least one qualifying contribution to CPP.

What are the Contribution rates of the Canada Pension Plan?

It is important to know that the CPP contributions among employers and employees are dividable at 50/50. The pensionable earnings of the employee decide what will be the deduction rates. The following table displays the details about Canada Pension Plan contributions for the year 2022:

1. Maximum Annual Pensionable Earnings = $64, 900

2. Basic Exemption Amount = $3, 500

3. Maximum Contributory Earnings = $61, 400

4. Employee And Employer Contribution Rate (%)= 5.70

5. Maximum Annual Employee And Employer Contribution = $3, 499.80

6. Maximum Annual Self-Employed Contribution = $6, 999.60

How much does CPP You Can Get?

FOR YOU

Register your business in Canada today

GET STARTED

“Most people are surprised at how much they’ll get through government benefits; for instance, if you start CPP at age 65 this year, you could get up to $1,203.75 per month.” –Mark Coutts.

The maximum payment benefit for Canada Pension Plan (CPP) is $1,253.59 per month. This figure is a yearly pension of $15,043. CPP benefits may vary each January and are dependent on the rate of inflation. At the beginning of 2022, the amount for CPP increased to 2.7%; this figure of CPP payment benefit may increase in 2023. 

Documents required for CPP Application

  • Your SIN Number.
  • Your current bank account details.
  • If you are looking for pension share, you need your spouse's SIN number.
  • To request for Child-Rearing Provision or CRP (CRP helps to qualify for a higher CPP benefit amount) you require your child's SIN number and birth certificate.

How To Apply for CPP?

There are two ways to apply for Canada Pension Plan (CPP):

1. Online Method

  • Open My Service Canada Account (MSCA) to create an account. (MSCA is a safe online portal to create, view, and update information for EI and CPP)
  • The estimated CPP amount you will be able to view in your MSCA
  • Answer all questions on your CPP application form.
  • Once the application is submitted, you will receive a confirmation notification.
  • You will receive the decision regarding CPP within 14 days.

2. Paper Application

  • First, download the CPP application form.
  • Then, please print the form, complete it, and send it to your nearest Service Canada Office.
  • If requesting for Child-Rearing Provision on your CPP application form, you need to add some personal details into the form.

Time to Take Action!

You can start collecting your CPP benefits in the early 60s. It is one of the primary sources of retirement benefits for Canadians. CPP retirement benefits can be determined by how much you contribute to the Canada Pension Plan and your tenure of employment in Canada. It's the right time to think about CPP. We are here to guide you around the clock. If you are confused about CPP, contact Yogi And Associates to learn more and earn more. 

Laila Batool

Executive Journalist

Recommended for you

Accounting

A Guide to High-Interest Saving Account:

Business

Claiming Your Business Expenses:Essential Guidelines

Business

Company Cars: To Lease or To Buy?

Business

The Top 3 Tax-Deductible Business Expenses in Canada

Business Incorporation

What to do next after Incorporating Your Business?

Payroll

Different Periods Of Payroll Frequency: An Essential Guide

Payroll

What is Payroll And How do I Set Up my Payroll

Business

A Quick Primer to Creating A CRA My Business Account

Business

Understanding the Tax Deadlines In 2022

Cryptocurrency

The Essential Guide to Cryptocurrency: Personal Income

Cryptocurrency

A Legal Guide to Crypto-currency: Business Income

Business

3 types of Master Business License

Business

Here’s How to Register for Master Business License

Business

How to Choose a Business Name in Canada?

Business

How to Start Your Business in Canada?

Business

How to choose a Corporate Fiscal Year-end Date

Business

Incorporating Your Business In Canada: How and Why

Accounting

Listing the Penalties for Filing Late GST/HST:

Accounting

The Legal Guide: GST/HST Return

Business

How to start charging and collecting GST/HST

Business

GST Number: How to Register for GST Number

Accounting

Everything You Need to Know about Input Tax Credits:

Accounting

Step By Step Guide To Payroll Remittances: PD7A Forms

Business

A Legal Guide to Work Permit in Canada:

Accounting

Four Essential Components of Payroll in Canada

Accounting

The Ultimate Payroll Set-up Checklist:

Business

A Complete Guide to Understand the TD1 Forms

Business

Minimum Wage Requirements: A Simple Guide

Business

Everything You Need to Know About Canada Pension Plan

Business

Why Should You Remit the Payroll Deductions

Business

The Ultimate Guide to Employment Insurance

Business

A Step-by-Step Guide to T4 Forms

Business

Employees and Contractors: The Beginners Guide!

Accounting

Everything You Need To Know About ROE

Accounting

2022 Statutory Holiday Schedule of Payroll:

Accounting

Is NFT Taxable In Canada?

Business

Which Business Expenses Are Tax-Deductible In Canada

Business

How to Understand Different Retirement Accounts

Business

5 Simple Ways to Know About CRCB Support Program

Business

The Essential Guide to CRSB Support Program

Business

What Is A Canada Worker Lockdown Benefit Program?

Business

Everything You Need To Know About Work Sharing Program

Accounting

Why is it important to return GST/HST?

Accounting

Exemption for charging GST/HST

Business

When and Why do I have to acquire an HST/GST number

Business

How to Register for HST/GST Number

Business Operation

Effectively run your business at home

Business Operation

What are the tools you can use to grow your business

Business

5 Amazing Benefits Of Soleproprietorship

Business Incorporation

Federal Vs Ontario: Which Incorporation is Best for You

Business Planning

How to write a Recession Proof Business Plan

Accounting

How to get approved for a Business Loan fast and easy