The Canada Pension Plan is a compulsory, contributory, earnings-related plan for employees that provides basic retirement, survivor, death and long-term disability benefits.
Retirement Plans Canadians typically receive retirement income from three sources: government- administered pension programs, employer-sponsored retirement savings programs and personal savings. GOVERNMENT PENSION PROGRAMS Canada has many government-administered pension, benefit and welfare programs that provide a certain degree of social security. Old Age Security (OAS) provides pensions to individuals from the age of 65, subject to residence requirements. Pensioners with high individual net incomes must repay part or all of the maximum OAS pension amount. For those with low incomes, a Guaranteed Income Supplement and an Allowance (paid to spouses and common-law partners of pensioners) may also be payable. These benefits are financed out of general tax revenues. The Canada Pension Plan (CPP) is a compulsory, contributory, earnings-related plan for employees that provides basic retirement, survivor, death and long- term disability benefits. For individuals employed or resident in Québec, the Québec Pension Plan (QPP) is applicable and is substantially similar to CPP. The employee’s contribution under CPP or QPP is a percentage of earnings that is matched by the employer’s contribution. CPP provides several possible types of benefits for employees who made a minimum contribution to the Plan: – retirement pensions to contributors who have reached 65 years of age (or are between 60 and 64 years of age, subject to meeting certain requirements); – benefits to a surviving spouse and/or surviving dependent child of the contributor; and – disability benefits to a contributor who is no longer able to secure substantially gainful employment. The employee’s and employer’s contributions for 2023 are each 5.95% of pensionable earnings over $3,500, up to a maximum of $66,000 (therefore, the maximum contribution payable in 2023 by each employee and employer is $3,754.45).
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Doing Business in Canada
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