Calculating basic contributions

Overview

This section details how members' basic contributions are calculated and includes the following topics:

Member contributions

All members must contribute to the Plan from the Plan Membership Date until such time as the member

  • terminates employment and PSPP membership, or
  • takes an unpaid leave of absence without pay for more than 30 days AND elects not to contribute for the duration of the leave, or
  • becomes eligible for LTIP benefits (at which time the Employer pays both the member and employer shares), or
  • is divested out of the PSPP (and membership is suspended),
  • commences early or normal retirement, or
  • opts out of the PSPP, if membership is optional, or
  • dies before retirement.

Membership after 65

The following members have the option of continuing to contribute to the Plan until November 30thof the calendar year in which they reach age 71:

  • They continue in active employment after the age of 65.
  • They have retired, began pension payments, and then returned to work (i.e., re-employed pensioners who rejoin the PSPP).

Contribution formula

Member's regular contributions are calculated using the following formula:

Currently 6.9% of Annual Salary up to the YMPE + 10% of Annual Salary above the YMPE
Effective April 2019 7.4% of Annual Salary up to the YMPE + 10.5% of Annual Salary above the YMPE

Annual salary means the member's regular base salary. It does not include overtime pay, payments in lieu of benefits, or any other special payments.

YMPE - The Year's Maximum Pensionable Earnings (YMPE) is set by the federal government to determine how much Canadians contribute to the Canada Pension Plan (CPP). The YMPE is adjusted each year based on the average wage in Canada. For 2019, the YMPE is $57,400.

From April 2018 to March 2019, the member contributes:

  • $6.90 for every $100 they earn up to the YMPE, plus
  • $10.00 for every $100 they earn above the YMPE

From April 2019 onwards, the member contributes:

  • $7.40 for every $100 they earn up to the YMPE, plus
  • $10.50 for every $100 they earn above the YMPE

Note: Employers must match all regular contributions that the member makes to the PSPP.

Limits and rates for calculating member contributions

For your convenience, we've provided the current and historical limits/rates that you will need to calculate member/employer contributions.

Current Canada Pension Plan YBE and YMPE rates

  • 2019 YBE (Year's Basic Earnings) is $3,500
  • 2019 YMPE (Year's Maximum Pensionable Earnings) is $57,400

Access historical YBE and YMPE figures and past PSPP contribution rates.

Employer and member contributions

The employer must pay the following contributions amounts into the PSPP Fund:

  • all contributions deducted from the member's contributory earnings plus
  • matching employer contributions plus
  • contributions made by the employer on behalf of the members on LTIP.

OPP additional contributions

The following table summarizes the current employer and member contribution rates for Ontario Provincial Police (OPP) members.

Contribution Rates Officers, Commissioned Officers, Deputy Commissioners & Commissioner Civilians
Basic Contributions Up to YMPE 7.2% 6.775%
Basic Contributions Above YMPE. 10.3% 9.875%
Additional Contributions
For OPP 50/30 Early Retirement Provision
2% n/a
Total Contributions Up to YMPE 9.2% 6.775%
Total Contributions Above YMPE 12.3% 9.875%

Important: The basic contribution rates for OPP officers and civilians are higher than the rates for regular members in order to fund additional retirement provisions available to them.

Retroactive salary increases

When a member receives retroactive salary increase payments, the Employer must recalculate the member's PSPP contributions using

  • the new calculation, based on the revised salary, and
  • the contribution rates in effect for the retroactive period.

Note: Please remember that a retroactive salary increase may also require you to amend the member's annual Pension Adjustment (PA).

Application of Retroactive Salary Increases:

We require retroactive contributions for retroactive salary increases for all members, even if the member:

  • is on a leave
  • is receiving LTIP benefits (if the change is prior to the beginning of the LTIP period), or
  • has terminated, divested, died, or retired.

OPB's online contribution calculator

You can use OPB's online contribution calculator to determine the required contributions for a number of different scenarios. The calculator is located in OPB's employer portal

Links:

Contribution calculation scenarios

The contribution rates for members and employers have been the same for a number of years. Therefore, the calculations used in the scenarios we've provided for you below can be used to determine both the member and employer portion of the basic contributions that must remitted each payroll cycle.

Use the links below to view the contribution calculations for the following scenarios:

Bi-weekly contribution calculation scenarios

Semi-monthly contribution calculation scenarios

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Please refer to these related topics:

Historical amounts

CPP: YBE and YMPE amounts from 2003 to 2019

Calendar Year YBE YMPE
2003 $3,500 $39,900
2004 $3,500 $40,500
2005 $3,500 $41,100
2006 $3,500 $42,100
2007 $3,500 $43,700
2008 $3,500 $44,900
2009 $3,500 $46,300
2010 $3,500 $47,200
2011 $3,500 $48,300
2012 $3,500 $50,100
2013 $3,500 $51,100
2014 $3,500 $52,500
2015 $3,500 $53,600
2016 $3,500 $54,900
2017 $3,500 $55,300
2018 $3,500 $55,900
2019 $3,500 $57,400

 

PSPP Contribution Rates from January 2003 to December 2019


Effective Date
Employee Contributions Employer Contributions
Rate 1
up to YBE
Rate 2
between YBE and YMPE
Rate 3
above YMPE
Rate 4
up to YBE
Rate 5
between YBE and YMPE
Rate 6
above YMPE
Jan-2003 8% 6.2% 8% 8% 6.2% 8%
Mar-2003 5% 3.2% 5% 8% 6.2% 8%
Mar-2004 8% 6.2% 8% 8% 6.2% 8%
Jan-2005 8% 6.2% 8% 8% 6.2% 8%
Jan-2006 8% 6.2% 8% 8% 6.2% 8%
Jan-2007 8% 6.2% 8% 8% 6.2% 8%
Jan-2008 8% 6.2% 8% 8% 6.2% 8%

Effective Date
Employee Contributions Employer Contributions
Rate 1
% of Annual Salary up to the YMPE
Rate 2
% of Annual Salary above YMPE
Rate 3
% of Annual Salary up to YMPE
Rate 4
% of Annual Salary above the YMPE
Jan-2009 6.4% 8.75% 6.4% 8.75%
Jan-2010 6.4% 9.5% 6.4% 9.5%
Jan-2011 6.4% 9.5% 6.4% 9.5%
Jan-2012 6.4% 9.5% 6.4% 9.5%
Jan-2013 6.4% 9.5% 6.4% 9.5%
Jan-2014 6.4% 9.5% 6.4% 9.5%
Jan-2015 6.4% 9.5% 6.4% 9.5%
Jan-2016 6.4% 9.5% 6.4% 9.5%
Jan-2017 6.4% 9.5% 6.4% 9.5%
Jan-2018 6.4% 9.5% 6.4% 9.5%
Apr-2018 6.9% 10% 6.9% 10%
Apr-2019 7.4% 10.5% 7.4% 10.5%

Bi-weekly contribution calculation scenarios

Use the following scenarios to calculate the member and employer portions of the contributions required for each bi-weekly payroll period.

Scenario 1: Calculating contributions for a regular, full-time member effective April 2019

Calculate the basic PSPP pension contributions for the member and employer as follows:

  • YMPE (2019): $57,400
  • Salary per bi-weekly pay cycle: $3,000.00
Step Action Example for Employer on a bi-weekly pay cycle from April 2019
1 Pro-rate the YMPE by the number of pay cycles in the calendar year. Number of bi-weekly pay cycles: 26*

Pro-rated YMPE: $57,400 / 26** = $2,207.69
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to the YMPE).

Note: Use the bi-weekly salary rate instead of the prorated YMPE, if the salary rate is lower than the prorated bi-weekly YMPE.
$2,207.69 x 7.4% = $163.37
3 If the salary rate is higher than the pro-rated YMPE, then multiply the difference by 10.5% (contribution rate on salary above the YMPE).

Note: This figure is zero if the bi-weekly salary rate is less than the prorated YMPE.
($3,000.00 - $2,207.69) x 10.5% = $83.19
4 Add the amounts calculated in Steps 2 and 3 together and then round the total to two decimal places. 

Result: Each pay cycle, this amount must be deducted from the member’s pensionable salary, matched by the employer, and remitted to OPB until the member's salary rate changes.
$163.37 + $83.19
= $246.56

* For this example, we used 26 pay cycles; Ministries pro-rate the YMPE using 26.08928.

** For Agencies, Boards and Commissions with 26 pay cycles (i.e., bi-weekly); every 11th year will be a 27-pay year. When in a 27-pay year the YMPE is to be pro-rated using 27 pays.

Scenario 2: Calculating contributions for a regular, part-time (RPT) member

Important: This scenario applies only to members who work on a regular part-time basis each payroll period. See Scenario 3 for direction on how to calculate contributions for a member employed on an unclassified basis (i.e., variable hours). Please remember that overtime is not pensionable and cannot be included in the calculation.

Calculate the basic PSPP pension contributions for the member and employer as follows:

  • YMPE (2019): $57,400
  • Regular part-time (RPT) ratio: 80%
  • Bi-weekly salary rate for a member employed at the full-time equivalent: $2,625.00
Step Action Example for Employer on a bi-weekly pay cycle from April 2019
1 Pro-rate the YMPE by the number of pay cycles in the calendar year. Number of bi-weekly pay cycles: 26*

Full-time equivalent salary per bi-weekly pay cycle: $2,625

Pro-rated YMPE: $57,400 / 26** = $2,207.69
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to the YMPE). 

Note: Use the full-time bi-weekly salary rate instead of the prorated YMPE, if the full-time bi-weekly rate is lower than prorated bi-weekly YMPE.
$2,207.69 x 7.4% = $163.37
3 If the salary rate of the full-time equivalent is higher than the pro-rated YMPE, then multiply the difference by 10.5% (contribution rate on salary above the YMPE).

Note: This figure is zero if the full-time equivalent bi-weekly salary rate of the full-time equivalent is less than the prorated YMPE.
($2,625.00 - $2,207.69) x 10.5% = $43.82
4 Add the amounts calculated in Steps 2 and 3 together to determine the required contributions for a full-time member. = $163.37 + $43.82
= $207.19
5 Pro-rate the contribution amount for a full-time member calculated in step 4 by the member's regular part-time ratio. Finally, round the resulting amount to two decimals places.

Result: Each pay period, this amount must be deducted from the RPT member's pensionable salary, matched by the employer, and remitted to OPB until the member's salary rate changes.
= $207.19 x 80%
= $165.75

* For this example, we used 26 pay cycles; Ministries pro-rate the YMPE using 26.08928.

** For Agencies, Boards and Commissions with 26 pay cycles (i.e., bi-weekly); every 11th year will be a 27-pay year. When in a 27-pay year the YMPE is to be pro-rated using 27 pays.

Scenario 3: Calculating contributions for an unclassified member

Important: This scenario applies only to members who work variable hours each payroll period. See Scenario 2 for direction on how to calculate contributions for a member employed a regular, part-time basis.

Calculate the basic PSPP pension contributions for the member and employer as follows:

  • YMPE (2019): $57,400
  • Member worked 60 hours during the payroll period. The standard bi-weekly hours are 72.5 hours
  • Bi-weekly Salary Rate for a member employed at the full-time equivalent: $2,400.00
Step Action Example for Employer on a bi-weekly pay cycle from April 2019
1 Pro-rate the YMPE by the number of pay cycles in the calendar year. Number of bi-weekly pay cycles: 26*

Salary per bi-weekly pay cycle at the full-time equivalent: $2,400

Pro-rated YMPE: $54,700 / 26** = $2,207.69
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to the YMPE). 

Note: Use the bi-weekly salary rate instead of the prorated YMPE, if the salary rate is lower than prorated bi-weekly YMPE.
$2,207.69 x 7.4% = $163.37
3 If the salary rate at the full-time equivalent is higher than the pro-rated YMPE, then multiply the difference by 10.5% (contribution rate on salary above the YMPE). 

Note: This figure is zero if the bi-weekly salary rate is less than the prorated YMPE.
($2,400.00 - $2,207.69) x 10.5%
= $20.19
4 Add the amounts calculated in Steps 3 and 4 together to determine the required contributions for a full-time member. = $163.37 + $20.19
= $183.56
5 Pro-rate the contribution amount for a full-time member calculated in step 4 by the number of hours the unclassified member actually worked. Finally, round the resulting amount to two decimals places. 

Result: Each pay period, this amount must be deducted from the unclassified member's pensionable salary, matched by the employer, and remitted to OPB until the member's salary rate changes.
= $183.56 x 60 / 72.5
= $151.91

* For this example, we used 26 pay cycles; Ministries pro-rate the YMPE using 26.08928.

** For Agencies, Boards and Commissions with 26 pay cycles (i.e., bi-weekly); every 11th year will be a 27-pay year. When in a 27-pay year the YMPE is to be pro-rated using 27 pays.

Scenario 4: Calculating the initial contributions for a member who is enrolled or terminated midway through a payroll cycle

Calculate the basic PSPP pension contributions for a regular full-time member and employer as follows:

  • YMPE (2019): $57,400
  • Bi-weekly salary rate: $3,000.00
  • Days worked in first pay period: 5 days

Note: You can also use the steps below to calculate the required contributions in the member's final payroll cycle if plan membership ends during a payroll cycle.

Step Action Example for Employer on a bi-weekly pay cycle from April 2019
1 Pro-rate the YMPE by the number of pay cycles in the calendar year. Number of bi-weekly pay cycles: 26*

Salary per bi-weekly pay cycle: $3,000

Pro-rated YMPE: $57,400 / 26** = $2,207.69
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to the YMPE). 

Note: Use the bi-weekly salary rate instead of the prorated YMPE, if the salary rate is lower than prorated bi-weekly YMPE.
$2,207.69 x 7.4% = $163.37
3 If the salary rate is higher than the pro-rated YMPE, multiply the difference by 10.5% (contribution rate on salary above the YMPE).

Note: This figure is zero if the bi-weekly salary rate is less than the prorated YMPE.
($3,000.00 - $2,207.69) x 10.5% = $83.19
4 Add the amounts calculated in Steps 2 and 3 together to determine the contributions required if the member had been enrolled for a full pay cycle. = $163.37 + $83.19
= $246.56
5 Pro-rate the contributions calculated in Step 4 by the actual no. of days the member contributed, then round the pro-rated figure to two decimal places.

Note: Each full pay period has 10 working days.

Result: Match and remit the prorated contributions for the initial payroll cycle. Remit the full contribution amount calculated in Step 4 in subsequent payroll cycles.
= $256.56 / 10 x 5
=$123.28

* For this example, we used 26 pay cycles; Ministries pro-rate the YMPE using 26.08928.

** For Agencies, Boards and Commissions with 26 pay cycles (i.e., bi-weekly); every 11th year will be a 27-pay year. When in a 27-pay year the YMPE is to be pro-rated using 27 pays.

Scenario 5: Calculating retroactive contributions for a member who receives a retroactive salary increase

Calculate the basic PSPP pension contributions for a regular full-time member and the employer in the initial payroll cycle as follows:

  • YMPE (2019): $57,400
  • Prior bi-weekly salary rate: $3,000
  • Prior bi-weekly 2019 contribution amount required: $233.35
  • New bi-weekly Salary Rate: $3,500.00
  • Number of payroll cycles that passed where contributions should have been calculated using the new salary rate: 5
Step Action Example for Employer on a bi-weekly pay cycle from April 2019
1 Pro-rate the YMPE using the number of cycles in a calendar year. Number of bi-weekly pay cycles: 26* 

Salary per bi-weekly pay cycle: $3,500.00 

Pro-rated YMPE: $57,400 / 26** = $2,207.69
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to the YMPE). 

Note: Use the salary rate if it's lower than the YMPE.
$2,207.69 x 7.4% = $163.37
3 If the member's new salary is higher than the pro-rated YMPE, then multiply the difference by 10.5% (contributions rate on salary above the YMPE). 

Note: This figure is zero if the salary rate is less than the YMPE.
($3,500.00 - $2,207.69) x 10.5% = $135.69
4 Add the amounts in Steps 2 and 3 and round the total to two decimal places.

Result: This calculation represents the contribution per pay period, based on the new salary rate that should be deducted from the member's pensionable salary.
$163.37 + $135.69 = $299.06
Calculate Arrears Contributions
5 Calculate the difference between the original bi-weekly contribution amount and the adjusted amount.

Result: The additional contribution amount per bi-weekly period has been determined.
$299.06 (new contributions) - $233.35 (old contributions)= $65.71
6 Calculate the total arrears owed by multiplying the retroactive contribution amount calculated in step 5 by the number of pay cycles where the adjusted contribution amount should have been deducted (i.e., 5 pay cycles). $65.71 x 5 = $328.55
7 Deduct the new contribution amount and the arrears from the member’s pensionable salary for the next pay cycle. All contributions are matched by the employer. New bi-weekly contributions: $299.06
Arrears contributions (total): $328.55
Total: $627.61

* For this example, we used 26 pay cycles; Ministries pro-rate the YMPE using 26.08928.

** For Agencies, Boards and Commissions with 26 pay cycles (i.e., bi-weekly); every 11th year will be a 27-pay year. When in a 27-pay year the YMPE is to be pro-rated using 27 pays.

Semi-monthly contribution calculation scenarios

Use the following scenarios to calculate the member and employer portions of the contributions required for each semi-monthly payroll period.

Scenario 1: Calculating contributions for a regular, full-time member

Calculate the basic PSPP pension contributions for the member and employer as follows:

  • YMPE (2019): $57,400
  • Salary per semi-monthly pay cycle: $2,500
Step Action Example for Employer on a semi-monthly pay cycle from April 2019
1 Pro-rate the YMPE by the number of pay cycles in the calendar year. Number of semi-monthly pay cycles: 24

Pro-rated YMPE: $57,400 / 24 = $2,391.67
2 Multiply the pro-rated YMPE by 7.4% (contribution rate on salary up to YMPE). 

Note: Use the semi-monthly salary rate instead of the prorated YMPE, if the salary rate is less.
$2,391.67 x 7.4% = $176.98
3 If the salary rate is higher than the pro-rated YMPE, then multiply the difference by 10.5% (contribution rate on salary above the YMPE).

Note: This figure is zero if the semi-monthly salary rate is less than the prorated YMPE.
($2,500 - $2,391.67) x 10.5% = $11.37
4 Add the amounts calculated in Steps 2 and 3 together and round the total to two decimal places. 

Result: Each pay cycle, this amount must be deducted from the member’s pensionable salary, matched by the employer, and remitted to OPB until the member's salary rate changes.
$176.98 + $11.37 = $188.35

Scenario 2: Calculating contributions for a member who is enrolled midway through a payroll cycle

Calculate the basic PSPP pension contributions for a regular full-time member and the employer in the initial payroll cycle as follows:

  • YMPE (2019): $57,400
  • Annual Salary Rate: $85,000
  • Payroll period where enrolment occurred: September 1st to 15th
  • Number of days enrolled in the PSPP: 10 (i.e., member enrolled on September 6th)

Note: You can also use the steps below to calculate contributions in the member's final payroll cycle if plan membership ends during a payroll cycle.

Step Action Example for Employer on a semi-monthly pay cycle from April 2019
1 Multiply the annual YMPE by 7.4% (contribution rate on salary up to the YMPE). 

Note: Use the converted semi-monthly salary rate if it's lower than the prorated YMPE.
$57,400 x 7.4% = $4,247.60
2 If the member's annual salary is higher than the YMPE, multiply the difference by 10.5% (contribution rate on salary above the YMPE).

Note: This figure is zero if the annual salary rate is less than the YMPE.
($85,000 - $57,400) x 10.5% = $2,898.00
3 Add the figures calculated in Steps 1 and 2 to calculate the annual contribution amount. $4,247.60 + 2,898.00 = $7,145.60
4 Determine the daily contribution amount (i.e., divide the annual contribution figure by 365 days, or 366 days in leap years). = $7,145.60 / 365 days
= $19.58 per day
5 Determine the contributions that must be remitted for the initial payroll cycle (i.e., multiply the figure calculated in step 4 by the number of calendar days the member was enrolled in the PSPP; e.g., 10 days).

Result: Match and remit the prorated contributions for the initial payroll cycle.
$19.58 x 10 = $195.80