Self-employed individuals and the 2025 CPP changes
Click on this infographic for information about self-employed individuals and the 2025 CPP changes.
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Moswen
- Self-employed freelance writer
- Wants to know if they will be affected by the 2025 Canada Pension Plan (CPP) changes
How do the 2025 CPP changes affect Moswen?
Self-employed individuals make second additional CPP contributions (CPP2) on net business income they earn between the first earnings ceiling, the Year’s Maximum Pensionable Earnings (YMPE), and the second earnings ceiling, the Year’s Additional Maximum Pensionable Earnings (YAMPE).
Self-employed individuals pay base, first additional, and CPP2 contributions when they file their annual tax return.
The changes to the CPP will provide up to 50% more CPP benefit income for self-employed individuals who retire in approximately 40 years.
How is the second earnings ceiling calculated?
Self-employed CPP2 contributions equal 8% of net business income between the first earnings ceiling and the second earnings ceiling.
In 2024: the second earnings ceiling is approximately YMPE plus 7%.
In 2025 and every year after: the second earnings ceiling will be approximately YMPE plus 14%.
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