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Breaking through the new second earnings ceiling
Starting in 2024, a second, higher earnings limit will be introduced. This will allow the Canadian Pension Plan (CPP) to protect a higher portion of your earnings. This new limit, known as the year’s additional maximum pensionable earnings (YAMPE), will not replace the original limit, known as the year’s maximum pensionable earnings (YMPE). Rather, it creates two different ranges of earnings that are protected by CPP:
- the original range, which goes to the original limit, and
- an additional range for earnings between the original limit and the new one.
| Contribution rate for first earnings ceiling |
YMPE (first earnings ceiling) |
Maximum yearly CPP contribution |
Contribution rate for second earnings ceiling |
2024 YAMPE (second earnings ceiling) |
2024 maximum yearly second CPP contribution |
| 5.95% |
$68,500 |
$3,867.50 |
4% |
$73,200 |
$188 |
The chart above outlines the CPP rates that apply until earnings rise above the first earnings ceiling. Income earned between the first and second earnings ceiling qualifies for the second CPP contribution, which is four per cent on the dollar between the first and second ceiling for both employers and employees. The deduction amount will not change until you reach the first earnings ceiling of $68,500 at which point you will deduct four per cent instead of the 5.95 per cent to a maximum amount of $188. There will be no CPP deducted after the second earnings ceiling of $73,200.00.
Clarity at every step (and ceiling)
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