CPP (Canada Pension Plan)
A mandatory contributory public pension that pays a monthly benefit for life, indexed to inflation.
Both you and your employer contribute 5.95% of pensionable earnings (between roughly $3,500 and the $68,500 YMPE in 2024); self-employed people pay both halves. The maximum CPP retirement benefit at age 65 in 2024 is about $1,365 per month (around $16,375 per year), though the average is much lower because most people did not contribute the max for all years. You can start CPP as early as 60 (with a 36% lifetime cut) or as late as 70 (with a 42% bump). Delaying to 70 is one of the highest-return decisions available to a healthy retiree. Quebec residents pay into QPP instead, which works the same way.
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.