What Is CPP and QPP?
Mandatory public pension contributions deducted from employment income. CPP applies in all provinces except Quebec, which operates the equivalent QPP.
Definition
The Canada Pension Plan (CPP) is a mandatory contributory public pension program administered by the federal government. All employed Canadians outside Quebec contribute a percentage of insurable earnings, matched by their employer. In 2026, the employee CPP rate is 5.95% on earnings between the basic exemption ($3,500) and the Year's Maximum Pensionable Earnings (YMPE, approximately $73,200). Maximum annual CPP contribution is around $4,157. Quebec operates the equivalent Quebec Pension Plan (QPP) at a similar rate. CPP contributions build entitlement to retirement, disability, and survivor benefits. CPP contributions are not income-tax deductible in the traditional sense but generate a non-refundable federal tax credit.
Formula
Example
You earn $60,000. Contributory earnings = $60,000 - $3,500 = $56,500. CPP = 5.95% x $56,500 = $3,362 per year, or about $280 per month deducted from your paycheque.