Year's Maximum Pensionable Earnings (YMPE)

The Year's Maximum Pensionable Earnings (YMPE) is the maximum amount of earnings that can be used to calculate the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions and benefits. The YMPE is updated annually and is based on the average wage of all employees in Canada.

The YMPE is used to calculate the amount of CPP and QPP contributions that employers and employees must pay. The contribution rate is 9.9% of earnings up to the YMPE. For 2023, the YMPE is $65,500. This means that employers and employees must pay CPP and QPP contributions on earnings up to $65,500.

The YMPE is also used to calculate the maximum CPP and QPP benefits that can be paid. The CPP benefit is based on 25% of the average of your best 35 years of earnings, up to the YMPE. For 2023, the maximum CPP benefit is $14,726. The QPP benefit is based on 25% of your best 30 years of earnings, up to the YMPE. For 2023, the maximum QPP benefit is $12,994.

The YMPE is an important concept for anyone who is working in Canada. It affects the amount of CPP and QPP contributions that you must pay, as well as the maximum amount of CPP and QPP benefits that you can receive.