How are Your Contributions Calculated
How Pension Contributions Work and are Calculated
Like many other pension plans in Canada, PSPP is designed to work with the Canada Pension Plan (CPP) using an integrated formula.
CPP payment premiums are based off the Year’s Maximum Pensionable Earnings (YMPE) which is set by the Federal Government each year. For 2025, YMPE is set at $71,300.
PSPP payment premiums are based on the YMPE and use two different contribution rates. As you and your employer contribute to CPP during the year, contribution premiums to PSPP will be at the lower rate. Should your salary exceed the YMPE in the year and your CPP premiums stop, your PSPP premiums will increase to the higher premium rate.
This year’s contribution rates are as follows:
| Member and Employer Contribution Rates for 2025 | ||
|---|---|---|
| Rate on salary up to $71,300 | 8.3% | |
| Rate on salary over $71,300 | 11.9% | |
Full-time Employment Contribution Example
Here are some examples of how we calculate your contributions if you make over or under YMPE.
Please click here if you are working part-time.
Eligible Pensionable Salary for PSPP
Pensionable salary is the portion of your earnings on which pension contributions are made. Pensionable salary in PSPP includes your gross basic pay for the performance of your regular duties. Subject to your employer’s salary policy, pensionable salary may also include weekend pay, shift differentials, and additional pay you receive while covering another position (sometimes called acting pay).
There are some types of pay that are not considered pensionable salary such as:
- Overtime pay
- Expense claims
- Variable pay (such as bonuses)
If you have questions about whether a type of pay is pensionable, you may want to ask your employer.
Maximum Amount of Pensionable Service
One component of the pension calculation is pensionable service. The Plan’s maximum pensionable service is 35 years. After reaching this maximum, you stop contributing to PSPP, but your participation in the plan will continue. This means any increases to your salary will be considered in your pension calculation.
If you are in a Combined Pensionable Service (CPS) relationship, please click here.
Salary Cap
Members can only contribute on pensionable salary up to the year’s maximum limit. In 2025, this maximum amount is set at $209,223.50. This rate is set by the Plan rules so your benefit stays within the limits set by the federal Income Tax Act. This means you will no longer make contributions to the plan as soon as your salary exceeds the year’s maximum.
Income Taxes
Your PSPP pension contributions are tax deductible. That means they will reduce your taxable income on your gross salary when filing your taxes for the year. Visit the Canada Revenue Agency’s website for more information.