Canada CPP and OAS Eligibility and Payment Details 2025
Canada’s retirement system is built on two foundational pillars: the Canada Pension Plan (CPP) and Old Age Security (OAS). These public pension programs form the backbone of retirement income for millions of Canadians. But understanding who qualifies, how much you’ll receive, and when to apply has never been more important—especially in 2025, as inflation and policy changes continue to shift the financial landscape.
This guide breaks down the Canada CPP and OAS eligibility and payment details in 2025, with everything you need to know to make informed decisions about retirement.
What Is the Canada Pension Plan (CPP)?
CPP is a contributory public pension designed to replace part of your employment income when you retire. Both employers and employees contribute to the plan, and it pays out monthly benefits based on your contribution history and retirement age.
CPP Eligibility in 2025:
- You must be at least 60 years old
- You must have made at least one valid CPP contribution
- You can start collecting between ages 60 and 70, but the earlier you start, the lower your monthly amount
CPP Payment Amounts in 2025:
| Age You Start CPP | Monthly Average (2025) | Maximum Monthly (2025) |
|---|---|---|
| 60 | ~$760 | $1,105 |
| 65 (standard) | ~$814 | $1,365 |
| 70 | ~$1,155 | $1,940 |
- The standard age to begin CPP is 65, but delaying until age 70 increases your monthly payment by up to 42%.
- Taking CPP early at 60 reduces it by about 36% compared to the standard.
Contributions are mandatory if you’re employed and between ages 18 and 65 (or 70 if you choose to delay retirement).
2025 CPP Contribution Rates:
| Contributor | Contribution Rate | Maximum Annual Contribution (2025) |
|---|---|---|
| Employee | 5.95% | $3,867.50 |
| Employer | 5.95% | $3,867.50 |
| Self-employed | 11.90% | $7,735.00 |
The maximum pensionable earnings in 2025 is $69,700, with a basic exemption of $3,500.
What Is Old Age Security (OAS)?
Unlike CPP, OAS is not based on contributions, but on residency in Canada. It’s a monthly benefit available to most seniors 65 and older, funded directly by general tax revenues.
OAS Eligibility in 2025:
- Must be 65 years or older
- Must have lived in Canada for at least 10 years after age 18 (for partial benefits)
- 40 years of residency in Canada grants the full benefit
- Legal residents and Canadian citizens both qualify
OAS can also be received abroad if you’ve met the 20-year minimum residency requirement before leaving Canada.
OAS Payment Amounts in 2025:
| Recipient Type | Monthly OAS (2025) | Annual Total |
|---|---|---|
| Full benefit (40 years) | ~$719 | ~$8,628 |
| Partial (10-39 years) | Prorated amount | Varies |
| 75+ Supplement | Additional ~$84 | ~$1,008 |
In 2025, seniors aged 75 and above continue to receive a 10% bonus on their OAS payment, a measure introduced in 2022 and still in effect.
Clawbacks and the OAS Recovery Tax
While OAS is a universal benefit, higher-income retirees may see their benefits reduced.
- The OAS clawback begins at an income threshold of $90,997 (2025).
- The full OAS is clawed back if your net income exceeds ~$147,000.
This is officially known as the OAS Recovery Tax, and it’s calculated annually based on your previous year’s income.
CPP vs OAS: What’s the Difference?
| Feature | CPP | OAS |
|---|---|---|
| Based On | Employment Contributions | Residency in Canada |
| Mandatory Contributions | Yes | No |
| Eligibility Age | 60–70 | 65+ |
| Can Receive Abroad | Yes | Yes (with 20+ years in Canada) |
| Income-Tested? | No | Yes (clawback above ~$90k) |
| Indexed to Inflation | Yes (quarterly) | Yes (quarterly) |
Both benefits are adjusted quarterly to keep up with inflation using the Consumer Price Index (CPI).
Should You Defer CPP or OAS?
If you can afford to wait, delaying your CPP or OAS can significantly increase your monthly benefit. Here’s how the math works:
- CPP increases by 0.7% per month deferred after 65
- OAS increases by 0.6% per month deferred after 65
- The latest you can start either is age 70
Delaying may not make sense for everyone—especially those in poor health or with shorter life expectancy—but for many, it’s a powerful tool for longevity planning.
FAQ: Canadian CPP and OAS in 2025
Q1: Can I receive both CPP and OAS at the same time?
A1: Yes. Most Canadian retirees collect both, and they are paid separately.
Q2: Can I receive OAS if I’ve lived outside Canada for years?
A2: Yes, if you’ve lived in Canada for at least 20 years after age 18, or if the country you’re in has a social security agreement with Canada.
Q3: Are CPP and OAS taxable income?
A3: Yes, both are fully taxable under federal and provincial income tax laws.
Q4: Can I collect CPP while still working?
A4: Yes. You can start collecting CPP at age 60 even while still employed, though you’ll also contribute to the Post-Retirement Benefit (PRB) if under 70.
Q5: Is there a pension for low-income seniors beyond OAS?
A5: Yes. The Guaranteed Income Supplement (GIS) provides monthly payments to low-income seniors who receive OAS.
Tools & Resources
- Apply for CPP & OAS – Service Canada
- CPP Retirement Pension Calculator
- OAS Clawback Calculator – Taxtips.ca
Planning ahead is critical. Whether you’re years from retirement or approaching 65, understanding the nuances of Canada CPP and OAS eligibility and payment details in 2025 can be the difference between just getting by and living comfortably.
