The first Canada Pension Plan (CPP) payments of 2025 are scheduled to be distributed on Wednesday. The CPP is a monthly, taxable benefit designed to replace income once someone retires. To qualify for CPP payments, individuals must have made at least one contribution to the plan during their working life.
Those who qualify will receive payments for the rest of their lives. Every worker in Canada, except for those in Quebec who are covered by a provincial pension plan, is automatically enrolled in the CPP. Both employers and employees contribute to the plan through payroll deductions, with employers matching the employee contributions.
Contributions are not required on earnings below $3,500 annually. For the year 2025, the CPP contribution rate is set at 5.95% on earnings up to $71,300. People earning more than this amount can expect to pay an additional 4% on earnings up to $81,200.
Self-employed individuals are required to contribute both the employer and employee portions.
first CPP distribution of 2025
The size of a monthly CPP payment varies based on several factors, including the contributor’s average earnings, the length of time they contributed to the plan, and the age at which they start their pension.
Starting the pension earlier results in smaller monthly payments, while delaying can increase them. As of January 2025, the maximum monthly amount for someone starting their pension at the standard age of 65 is $1,433. The average payment for new retirees at age 65 was approximately $800 per month in October 2024.
Periods of low or no income, such as time taken off due to disability or to raise children, will not negatively affect the retirement amount. The government’s policy allows for dropping up to eight years of lowest earnings from the earnings history. Additionally, individuals under 70 who continue to work while receiving CPP can still contribute to the plan, which will increase their retirement income through post-retirement benefits.
Contributions completely stop at age 70 regardless of employment status. CPP contributions can also be split equally between married or common-law couples in the event of separation or divorce. The CPP payments for 2025 will be distributed on the following dates:
[Insert Dates Here]
The above information provides readers with a clear understanding of how and when CPP payments work, especially focusing on the first payments of the year 2025.
