The Year’s Additional Maximum Pensionable Earnings (YAMPE) is a new upper earnings limit introduced as part of the CPP and QPP enhancements. It applies to higher-income earners and is used to calculate the second tier of contributions (CPP2/QPP2).
How It Works
Before 2024, contributions were only made up to the YMPE (Year’s Maximum Pensionable Earnings). With YAMPE, income above the YMPE up to the YAMPE limit is also subject to additional contributions under CPP2 or QPP2, leading to higher pension benefits later.
Why It Matters
- Higher pensions: Ensures high earners build larger retirement benefits.
- Expanded coverage: Broadens the contribution base beyond YMPE.
Final Thoughts
YAMPE complements YMPE by expanding contribution requirements for higher earners. It strengthens CPP and QPP benefits for future retirees, though it increases current payroll deductions.