CPP Rates

The Canada Revenue Agency announced that the 2025 Canada Pension Plan (CPP) maximum pensionable earnings will be $71,300, up from $68,500. The basic exemption amount for 2025 remains at $3,500.

The employee and employer contribution rates for 2025 will remain at 5.95 per cent. The maximum employer and employee contribution to the plan for 2025 will be $4,034.10 each.

CPP2 Rates

Effective January 1, 2025, a higher second earnings ceiling of $81,200, known as the Year’s Additional Maximum Pensionable Earnings (YAMPE), will be used to determine second additional CPP contributions (CPP2). This CPP2 is part of the CPP enhancement.

As a result, pensionable earnings between $71,300 and $81,200 are subject to CPP2 contributions.

Remember that the enhanced portions of the CPP contributions give you a tax break at source. When you stop contributing to CPP, this tax break will no longer apply, and as a result, you may notice a slight increase in your income tax deductions.

Your pay will reflect these rate changes starting with the first pay of January 2025.

View the full details of the changes here.

From Human Resources