Year's Maximum Pensionable Earnings (YMPE)

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A term used in Canada to refer to the maximum amount of income that is subject to Canada Pension Plan (CPP) contributions in a given year.
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The Year's Maximum Pensionable Earnings abbreviation is YMPE. It is a word that is commonly used in Canada to refer to the highest amount of income that is liable to Canada Pension Plan (CPP) contributions in a given year. Statistics Canada calculates the YMPE using the typical wage and salary levels in Canada, and it is then annually adjusted for inflation.


The YMPE is important for both employees and employers who contribute to the CPP. The CPP is a required social insurance program that offers eligible Canadians retirement, disability, and survivor benefits. Contributions from employees and their employers, as well as investment income from the CPP fund, are used to pay for the CPP.

The YMPE determines how much CPP contributions employees and businesses are required to make. The YMPE for 2023 is $67,500, which means that up to this level, both employees and employers must contribute to the CPP. Employers and employees will each be required to pay $4,050 in CPP contributions for the year due to the 6.0% contribution rate for 2023.

The amount of CPP benefits that employees are eligible for is also impacted by the YMPE. In order to determine a worker's CPP benefits, a portion of their average earnings over the course of their contribution period—typically their whole working life—must be used. The CPP benefits, however, are restricted to a maximum sum based on the YMPE. For instance, the maximum monthly retirement pension in 2023 for individuals 65 and older is $1,203.75, or 25% of the YMPE.

One of the elements that affect how much Canadians can put aside through the CPP for retirement is the YMPE. Canadians can plan ahead and choose wisely regarding their retirement income by understanding the YMPE and how it affects their CPP contributions and benefits.
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