What are Contributory Earnings, the Years Basic Exemption, and the Years Maximum Pensionable Earnings?
Contributory Earnings are the earnings on which you pay pension contributions. They are based on your actual income, but do not include overtime pay, most lump sum termination payments, and certain other types of payments. The Year’s Basic Exemption and Maximum Pensionable Earnings are amounts relating to the Canada Pension Plan (CPP). The Year’s Basic Exemption is the amount of earnings below which you do not contribute to CPP. The amount is currently frozen at $3,500. The Year’s Maximum Pensionable Earnings is the maximum amount of earnings on which you contribute, and also the amount on which CPP benefits are based. In 2009, it is $46,300.
