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 2026, YMPE is set at $74,600.

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:

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.

For a salary of $78,000

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 2026, this limit is $218,991.00, set by the Plan rules to ensure benefits remain within the limits established by the federal Income Tax Act. Once your pensionable salary reaches this amount, you will no longer make contributions to the Plan for the remainder of the year.

The salary cap also represents the maximum pensionable salary used to calculate your pension benefit. If your pensionable salary was higher than the salary cap in one or more of the Highest Average Salary years used to calculate your pension benefit, PSPP will use the salary cap amount for those years.

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.