Increasing CPP Pensionable Earnings to $68,500 in 2024 | What You Need To Know. The Canada Pension Plan (CPP) is set to undergo incremental changes in 2024, impacting eligible Canadians. This update revolves around an increase in the maximum pensionable earnings from CAD 66,600 in 2023 to CAD 68,500 in 2024. This adjustment is part of ongoing efforts to enhance CPP benefits for current workers and future retirees.
Contribution Changes for 2024
In the upcoming year, the maximum contribution for each employee will rise to CAD 3,867.50, up from CAD 3,754.45 in 2023. Both employer and worker CPP contribution rates for 2024 will be 5.95%, while the self-employed (SE) contribution rate will be 11.9%, reflecting an increase from CAD 7,508.90 in 2023 to CAD 7,735.00 in 2024. It’s crucial to note that the base exemption amount remains unchanged at CAD 3,500 for 2024.
CPP Maximum Pensionable Earnings Details
Starting in 2024, Canadians will be required to contribute to the CPP based on pensionable wages up to CAD 68,500.
The base exemption amount remains at CAD 3,500, but the maximum pensionable earnings cap is rising from CAD 66,600. Additionally, a new secondary threshold has been introduced, necessitating CPP2 contributions for pensionable wages falling between CAD 68,500 and CAD 73,200.
- Contribution Rates and Limits for 2024
- Employer/Employee Contribution Rate: 5.95%
- Self-Employed Contribution Rate: 11.9%
- Yearly Maximum Pensionable Earnings (YMPE): CAD 68,500
- Maximum Contribution (Employer/Employee): CAD 3,867.50
- Maximum Contribution (Self-Employed): CAD 7,735.00
CPP Contribution Rates Comparison (2019-2024)
| Year | Employer/Employee | Self-Employed | YMPE | YMC (Employer/Employee) | YMC (Self-Employed) |
| 2024 | 5.95% | 11.9% | 68,500 CAD | 3,867.50 CAD | 7,735 CAD |
| 2023 | 5.95% | 11.9% | 66,600 CAD | 3,754 CAD | 7,508.90 CAD |
| 2022 | 5.7% | 11.4% | 64,900 CAD | 3,499 CAD | 6,999 CAD |
| 2021 | 5.45% | 10.9% | 61,600 CAD | 3,166 CAD | 6,333 CAD |
| 2020 | 5.25% | 10.5% | 58,700 CAD | 2,898 CAD | 5,796 CAD |
| 2019 | 5.1% | 10.2% | 57,400 CAD | 2,749 CAD | 5,498 CAD |
CPP Enhancement Benefits in 2024
The CPP enhancement in 2024 is anticipated to elevate the maximum CPP retirement payment by approximately 50%, reaching a maximum benefit of CAD 23,832. This substantial increase, compared to the current maximum of CAD 15,679, is designed to provide enhanced financial security for retirees.
The expanded CPP benefits will be gradually implemented, with ongoing contributions sustaining the improvement until 2025. The greatest benefit increases are expected for young Canadians entering the workforce, with the CPP’s income replacement rising from 25% to 33% of the Yearly Maximum Pensionable Earnings (YMPE).
Conclusion
The 2024 CPP adjustments mark a positive step toward financial security for Canadians. With increased maximum pensionable earnings and enhanced benefits, the CPP aims to provide a stronger foundation for retirement, benefiting both current and future contributors.
