Upcoming Changes to CPP Contribution Rates for CAF Members
December 12, 2023 – Defence Stories
Canadian Armed Forces (CAF) members, your Canadian Pension Plan (CPP) contribution rates for calendar year 2024 will soon change as part of the CPP Enhancement.
The CPP Enhancement was designed to increase retirement income for working Canadians and their families. Beginning January 1, 2019, most Canadian employees, employers, and self-employed individuals across the country, including CAF members, began making additional contributions to the CPP under this initiative. Those contributing to the CPP Enhancement will ultimately receive a higher CPP retirement pension, post-retirement benefits, disability pension, and survivor’s pension upon retirement.
Effective January 1, 2024, the year’s maximum pensionable earnings (YMPE) for CPP and Québec Pension Plan (QPP) will rise from $66,000 to $68,500. Consequently, member contributions will increase by $113.05 a year, raising the total contribution from $3,754.45 to $3,867.50 a year.
Additionally, a second earnings ceiling called the year’s additional maximum pensionable earnings (YAMPE), will be introduced for members earning over $68,500. For 2024, this second earnings ceiling will be $73,200. The contribution rate for earnings above the YMPE and up to the YAMPE is 4%, to a maximum of $188 a year.
Therefore, for 2024, if members earn beyond the salary of corporal pay increment 2, the maximum increase in pension contributions per year will be $301.05 ($113.05 + $188), or about $25 per month.
As a reminder of what occurs every year, CAF members will observe a reduction in the amount deposited into their bank accounts in January. This decrease is a result of the restart of CPP contributions, EI premiums and/or PPIP (Québec residents) in the new year.
If you have any questions, or would like to reference additional information and resources, please visit the links below.
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