An employee does not pay CPP in the month they turn 18, or in any month before it. Deductions start with earnings received after that birthday month, so someone who turns 18 on 15 June has CPP taken from their first pay dated in July.
This is general information, not professional advice.
The rule
The Canada Revenue Agency treats earnings received up to and including the month of the 18th birthday as non-pensionable. The day of the month does not matter. A birthday on 1 June and a birthday on 30 June both mean June is free of CPP and July is the first month that counts.
What counts is when the pay is received, not when the work was done. If a pay dated 3 July covers work from late June, the whole payment is still pensionable, because it was received after the birthday month.
The first-year maximum is smaller
Because the employee is pensionable for only part of the year, the yearly maximum contribution and the basic exemption are both reduced. The CRA gives this method:
- Take the maximum annual pensionable earnings and subtract the $3,500 basic exemption. For 2026 that is $74,600 minus $3,500, which leaves $71,100.
- Multiply by the number of months the employee is pensionable.
- Divide by 12.
- Multiply by the CPP rate, 5.95% for 2026. This is the most CPP you can deduct that year.
- Subtract any CPP you have already deducted from that employee this year.
Worked example
Say an employee turns 18 on 15 June 2026. The months after June are July to December, so there are 6 pensionable months.
- $71,100 x 6 = $426,600
- $426,600 / 12 = $35,550
- $35,550 x 5.95% = about $2,115.23
That is the ceiling for the year. In practice a young employee usually earns well below it, so the cap matters only for high earners. The exemption also applies in smaller pieces: it is spread across the pay periods, so CPP is not simply 5.95% of everything over $3,500.
Common mistakes
- Starting in the birthday month. The CRA says that month is still non-pensionable.
- Waiting until the January after the birthday. CPP starts the month after, in the same year.
- Forgetting to prorate the maximum, which can lead to over-deducting late in the year for a high earner.
- Mixing up Quebec. Employees whose province of employment is Quebec pay QPP, not CPP.
Payroll software
Most payroll software works this out from the birth date on the employee record. If CPP appears on a pay dated in the birthday month, or is missing a month after it, check that the birth date was entered correctly before changing anything by hand.
Related limit at the other end
The CRA page for employers describes the contribution age range as 18 to 69. Earnings after the month an employee turns 70 are not pensionable, and from age 65 an employee can ask to stop contributions by giving the employer Form CPT30.
Sources
- CRA: Manual calculation for CPP
- CRA: Checking the amount of CPP you deducted
- CRA: Canada Pension Plan (CPP) for employers
- CRA: CPP contribution rates, maximums and exemptions
Last checked: 18 October 2026