How pension contributions work

You contribute to your pension through automatic payroll deductions. Your employer also contributes to your pension. 

How much does my employer contribute?

Every time you contribute to your pension, your employer contributes too. 

The employer contribution rates are:

  • 9.43% of your salary up to and including the year’s maximum pensionable earnings (YMPE) 
  • 10.93% of your salary above YMPE

For example, in 2017 YMPE is $55,300. If your annual salary is $60,000, your employer would contribute $5,728.50 to your pension. This is calculated as follows:

9.43% x $55,300 = $5,214.79
10.93% x ($60,000-$55,300) = $513.71
= $5,728.50

For pensionable service earned on or after April 1, 2018, the amount of your employer's contribution will no longer be based on YMPE. Your employer will contribute a single amount of 9.85% of your salary.

For example, if your annual salary on or after April 1, 2018, was $60,000, your employer's pension contribution in 2019 would be $5,910.00. This is calculated as follows:

9.85% x $60,000 = $5,910.00

Your employer's contribution includes a portion (2.75 per cent of your salary) paid to the inflation adjustment account (IAA)  to fund annual inflation adjustments, which are not guaranteed. Post-retirement group benefits are partially funded from a portion of employer contributions that would otherwise go to the IAA.

Page last updated: March 16, 2018