Pensions in Canada: An essential guide for expats [2026]

Canada has good living standards, great public services, and many beautiful natural landscapes, all of which help to make it a country that scores well on international quality of living indices. It also has a strong pension system that makes it an attractive location for retirees.

Expats who want to stay in the country long term should understand the retirement options available to them and how to qualify for them. For many expats, retirement isn’t just about local savings – it’s about managing a “global pension”.

Understanding Canadian pension system: An overview 🇨🇦

Like many countries, Canada has what is known as a “three-pillar” pension system made up of public, occupational, and private pensions. Public pensions are two-tier, made up of a government-funded basic pension (Old Age Security) and an earnings-related Canada Pension Plan (or Quebec Pension Plan in Quebec). Beyond this are voluntary workplace pensions and private savings plans which act as supplements to public provision.

Canada ranks 20th out of 44 countries on the 2025 Natixis Global Retirement Index, which measures retirement security across four areas: health, finances, material wellbeing, and quality of life. This is a drop from 13th place in 2024.

In the 2025 Mercer CFA Institute Global Pension Index, Canada is mid-ranked (between 16–24) out of 52 countries and receives a B grade for its pension system.

What is the Three-pillar framework?

The three-pillar pension framework in Canada consists of:

• Public pensions: This consists of two schemes: Old Age Security (OAS), a tax-funded basic pension for Canadian residents; and the Canada Pension Plan (CPP), a mandatory earnings-based pension for workers (Quebec has a separate pension plan). Nearly all eligible seniors receive a public pension in Canada.
• Occupational pensions: These are workplace registered pension plans (RPP) offered by many Canadian employers. Most are defined benefit plans, with others being defined contribution schemes. Employers typically contribute towards these plans. In 2023, 37.7% of workers were participating in RPPs.
• Private individual pensions: These include tax-deferred private registered retirement savings plans (RRSP) as well as tax-free savings accounts (TFSA), which aren’t specifically retirement accounts but many Canadians use them for retirement savings. 21.7% of taxpayers in Canada made RRSP contributions in 2022. Around 58% of Canadians have a TFSA.

Pillar	Category	Primary objective	Funding source
Pillar 1	Public pension (OAS and CPP)	Anti-poverty / Basic livelihood	Tax-funded (OAS); Mandatory social security (CPP)
Pillar 2	Occupational pension	Standard of living maintenance	Employer & employee contributions
Pillar 3	Private savings	Individual enhancement	Voluntary personal contributions

Canada’s public pension system has a distinctive two-part structure. It includes a tax-funded basic pension, Old Age Security (OAS), which serves as the country’s main anti-poverty program for seniors, and a mandatory earnings-based Canada Pension Plan (CPP), which replaces a portion of a worker’s income in retirement.

Together, these programs provide broad coverage and income stability for older Canadians. As a result, Canada’s senior poverty rate is lower than many OECD countries.

At the federal level, public pension policy is overseen by Employment and Social Development Canada, while benefits are administered and delivered through Service Canada. Quebec has its own separate plan, the Quebec Pension Plan (QPP), which is administered by the provincial government.

2026 pension reforms and updates 🗓️

💡 Key pensions updates for 2026 include:

• A 2% indexation increase for many public payments as part of ongoing cost-of-living adjustments.
• Increase in annual contribution ceilings to account for inflation.

Pensions advice and support in Canada

It’s sensible to seek professional advice on your Canadian pension, especially if you’re looking to make further investments or combine/transfer pensions from your home country.

You can get advice from a variety of sources, including:

• FP Canada
• Financial Advisors Association of Canada (Advocis)
• Institute of Advanced Financial Planners (IAFP)

Before choosing an advisor, make sure they are registered on the Canadian Securities Administrators (CSA) website and have a license to provide advice in Canada. The Government of Canada website has information on choosing a financial advisor.

If you receive pensions in more than one country or need to transfer pension payments abroad, the Wise Account can make things easier.

With the Wise Account, you can:

• Hold money in 40 currencies
• Send payments to 140 countries
• Convert and send money at low cost, with fees starting at 0.48%
• Get extra discounts on large transfers (above GBP 20,000 or equivalent)

*Product and feature availability varies by country. Eligibility and fees apply, and exchange rates can change. You can learn more here on wise.com

👥 Eligibility: Who can claim a pension in Canada?

Pension age in Canada

The standard pension age in Canada is 65. This is the age when you can start receiving OAS, although you can delay this up until age 70 to receive higher monthly payments.

You can start claiming CPP from the age of 60, although your payments will be permanently reduced if you claim before age 65. Eligible claimants can increase their monthly benefit by delaying their claim, with payments rising each year until age 70 (or age 72 for the Quebec Pension Plan).

Early retirement options

The earliest age to claim CPP in Canada is 60, but your monthly payment will be permanently reduced – by up to 36% (0.6% each month) compared with claiming at full retirement age.

There is a proposed Early Retirement Incentive for the Public Service Pension Plan, which is the pension for federal public service employees in Canada. Under these proposals, workers would be able to retire from the age of 50 (or from age 55 if they joined the pension plan after 31 December 2012) without the early retirement reduction (5% per year) if they meet certain eligibility conditions.

Private retirement accounts, such as RPPs and RRSPs, often have early retirement options, but the rules and penalties vary depending on the type of account.

Qualifying years and contribution minimums

Eligibility for a public pension in Canada differs between the two pension types.

For OAS, you need to be a Canadian citizen or legal resident who has lived in Canada for at least 10 years since age 18 (increased to 20 years if you live outside of Canada when you apply for the pension). OAS is tax-funded rather than contribution-based, but the amount you receive depends on how long you have lived in Canada. To receive the full OAS pension, you need to have lived in Canada for 40 years.

For CPP, you need to have made at least one valid contribution to the pension. This equates to earnings from work or self-employment above the basic exemption (currently CAD 3,500). To receive a full CPP, you need to make around 40 years of contributions.

Below is a table outlining requirements for minimum and full public pensions.

📌 Benefit level	🗓️ Minimum years required / age (2026)	📂 Eligibility criteria
Partial OAS	10 years; 65 age	Residency in Canada
Full OAS	40 years; 65 age (with payment increases if deferred until age 70)	Residency in Canada
Partial CPP	One contribution above the basic exemption (CAD 3,500); 60 age	Earnings-based contributions
Full CPP	40 years; 65 age (with payment increases if deferred until age 70)	Earnings-based contributions

➡️ You can check your eligibility for both public pensions on the Government of Canada website.

What happens if you are not eligible for a full pension? 🤔

If you do not qualify for a public pension in Canada, you may still be eligible for alternative support. This could include:

• Guaranteed Income Supplement: If you receive OAS but have a low income below the annual threshold
• Provincial/Territorial Social Assistance: Each Canadian province offers needs-based income assistance programs
• Disability benefit: If you are unable to work because of a disability and are aged under 65
• Survivor’s pension: If you were married/in a common-law partnership with a deceased CPP contributor

International pension agreements for expats 🌍

Expats living in Canada may qualify for a public pension if they meet the standard eligibility requirements.

If you don’t meet eligibility requirements, you may still qualify for a public pension if your home country has an international social security agreement with Canada.

Around 50 countries have agreements in place with Canada, including the US, the UK, France, Australia, and Japan.

In addition to preventing double social security contributions (paying to both countries on the same earnings), these agreements help workers qualify for benefits by allowing them to combine periods of coverage in both countries to meet eligibility thresholds.

For example, if you move to Canada from the UK and previously contributed to the UK system for six years, those years may be combined with your Canadian contribution or residence history to help you qualify for benefits.

Each country would then pay a pension based only on the periods completed under its own system.

Transferring your foreign pension to Canada ⬅️

Although Canada has social security agreements with many countries, these agreements do not allow pensions to transfer between countries.

Each country pays benefits separately under its own rules. As a result, expats typically receive two separate pensions at retirement – one from their home country and one from Canada (if they qualify for both).

For example, someone who lived for 35 qualifying years in France and then for seven years in Canada may receive:

• A French pension based on 35 years of contributions in France, and
• CPP based on their contributions in Canada, along with OAS based on their seven years of Canadian residency

The French years help them meet Canadian eligibility requirements, but the Canadian pension payments are based only on their Canadian work and residency history.

Foreign workplace or private pensions can sometimes transfer into Canadian retirement accounts, depending on the type of pension and the country. It is also sometimes possible to transfer lump-sum payments into a Canadian bank account or a retirement savings plan.

However, this may trigger early withdrawal penalties and taxes in your home country (as well as Canadian income tax if you are a tax resident), so it’s important to check implications first.

UK residents can transfer their pension funds to Canadian funds that are part of the Qualifying Recognised Overseas Pension Scheme (QROPS). However, since 2017 there has been a 25% Overseas Transfer Charge on some UK pension transfers abroad. If you want to transfer a UK pension to Canada, it’s a good idea to seek professional advice before doing so.

Managing foreign pension income and payments with Wise

If you are transferring a foreign pension to Canada, it’s a good idea to compare providers and find the most cost-effective option.

Receiving a pension into a local Canadian bank account from somewhere like the US, UK, EU, or Japan might incur high receiver fees and unfavourable exchange rates.

Wise Account can provide a solution to these problems. This multi-currency account allows you to hold money in 40 currencies and offers account details in 20 currencies to receive payments internationally.

You can also send money transfers to 140 countries. Conversions are at the mid-market rate with transparent fees, starting at 0.48% per transaction.

Canadian pension rates, contributions and calculations 🔢

How the Canadian pension is calculated 💡

OAS is calculated according to:

• Your age when you start receiving the pension (between 65–70)
• How long you have been a Canadian resident (between 10–40 years)
• Your overall net income
• Your current age (those aged 75+ are eligible for a pension increase)

The maximum monthly payment (2026) is CAD 742.31 (or CAD 816.54 if you’re aged 75+).

CPP is calculated according to:

• Your age when you started receiving the pension (between 60–70)
• How much you have contributed and for how long
• Your average earnings throughout your life

The maximum monthly payment (2026) is CAD 1,507.65 and the average monthly payment (2025) is CAD 803.76.

Amounts are different for the Quebec Pension Plan (QPP).

You can calculate your public pension entitlement using the OAS calculator and the Canadian Retirement Income Calculator.

Canadian pension contribution rates

Workers in Canada make Social Security contributions through payroll taxes. The 2026 rates are:

• 11.9% of salary (on earnings between CAD 3,500 and CAD 74,600), which is split equally between employee and employer contributions
• 8% of earnings between CAD 74,600 and CAD 85,000 under the new CPP enhancement (CPP2)

Self-employed workers have to make the full 11.9% contribution themselves, but can claim the employer 50% back as a tax deduction.

📌 Category	👥 Employee contribution %	🏢 Employer contribution %	🔢 Total contribution %
Standard employee CPP	5.95%	5.95%	11.9%
Self-employed CPP	11.9%	N/A	11.9%
Standard employee CPP2	4%	4%	8%
Self-employed CPP2	8%	N/A	8%

Contribution rates are different for the QPP.

Canadian pension tax relief and incentives

Self-employed workers in Canada can deduct the 50% employer portion towards public pension contributions when calculating their federal income tax.

Both OAS and CPP are subject to federal income tax. Furthermore, they do not qualify for Pension Income Tax Credit or pension income splitting, which apply to private pension income in Canada.

However, all residents are entitled to the basic personal amount federal tax credit (CAD 16,129 in 2026). You can also claim the Age Amount tax credit available to individuals aged 65+ if your net income is below the threshold (CAD 105,709 in 2026). The current maximum Age Amount is CAD 9,028.

Because tax treatment can vary depending on total income and filing status, it may be helpful to speak with a qualified financial or tax professional.

Supplementary and voluntary support ➕

Occupational pensions

Canadian workers can supplement their public pensions with voluntary private workplace plans. Not all employers offer these, but many large and medium-sized companies do.

Occupational pensions in Canada are known as registered pension plans (RPP). The two main types are:

• Defined benefit plans
• Defined contribution plans

Defined benefit plans promise a specified pension payment in retirement, typically based on years of service and a formula linked to salary (often the average of the highest earning years). These plans remain common in the public sector. Both employees and employers contribute, although contribution rates are determined by plan rules and are not necessarily equal.

Defined contribution plans involve fixed contributions from the employee, employer, or both. Contributions are invested, and retirement income depends on total contributions and investment performance. These plans are now more common in the private sector.

Private individual pensions

Many Canadians also supplement public and workplace pensions with voluntary retirement savings. The main vehicle is the registered retirement savings plans (RRSP) that individuals can contribute to during their working years and withdraw funds in retirement.

Both workplace RPPs and individual RRSPs operate on a tax-deferred basis, meaning that you pay tax on the withdrawals rather than when you make contributions.

This can be advantageous, as you can benefit from lower tax rates as well as accessing forms of tax relief. These include Pension Income Tax Credit and pension income splitting arrangements.

Other pension income options

In addition to RRSPs, there are a number of investment options in Canada that can help you plan for retirement, including investment funds, high-interest savings accounts such as tax-free savings accounts (TFSA), and property investments.

While these options do not offer the same tax advantages as retirement accounts, they can provide additional flexibility and income in retirement.

💡Tip: If people opt for an early retirement or a lump-sum payout from a private pension provider, they may need to transfer a significant amount of capital into Canada.

Wise money transfers are made using the mid-market exchange rate which helps avoid excessive hidden fees, and there are discounts for large-amount transfers (above GBP 20,000 or equivalent).

Support for low earners and disability pensions

Canada has several federal programs that provide a financial safety net for older adults, people with disabilities, and families with limited income. Key programs include:

• Guaranteed Income Supplement: If you receive OAS but have a low income below the annual threshold
• Guaranteed Income Supplement Allowance: If you are a spouse or common-law partner of a GIS recipient
• Provincial/Territorial Social Assistance: Each Canadian province offers needs-based income assistance programs
• Disability benefit: If you are unable to work because of a disability and are aged under 65
• Post-Retirement Disability Benefit: If you claimed CPP between ages 60–65 and are assessed as having a disability during this period, provided you have made sufficient pension contributions
• Survivor’s pension: If you were married/in a common-law partnership with a deceased CPP contributor

📌 How to apply for a Canadian pension 📂

You usually don’t need to apply for OAS as enrolment is automatic. However, you will need to apply if you want to change or delay your start date.

For the CPP, you will need to apply when you want to start receiving your pension.

The application timeline for a Canadian pension

You can apply for your CPP up to 12 months before your chosen start date. This means the earliest you can apply is when you turn 59. There are two ways to make your application:

• Online by setting up a My Service Canada account
• By completing form ISP-1000 and sending it to a Service Canada office

The application usually takes around 30–60 minutes to complete. Once submitted, Service Canada reviews your application. This typically takes 90–120 days.

Required documentation checklist for a Canadian pension

You will need to provide the following when applying for your CPP:

• Social Insurance Number (SIN)
• Bank account details
• Information on any dependents linked to your application (e.g., spouse, children if applying for disability or child benefits)
• Information on any periods where you have lived outside Canada

FAQs: Quick answers for Canadian pension questions

Can I claim my Canadian pension if I move abroad?

In most cases, you can claim your Canadian pension if you move overseas, although the residency requirement for OAS increases from 10 years to 20 years for those outside Canada. You should notify the authorities of your new address. Payments are typically deposited in Canadian dollars into Canadian bank accounts, although it may be possible to arrange for deposits to local accounts.

Is my foreign pension taxable in Canada?

This depends on your tax residency status, the type of pension, and whether a tax treaty is in place. If you are a Canadian tax resident, you pay tax on your worldwide income, including foreign pensions. However, you can prevent double taxation if there is a tax treaty between Canada and your home country.

What is the minimum state pension in 2026?

There isn’t a standard minimum amount that applies to everyone in Canada, as amounts depend on residency (OAS) and earnings-based contributions (CPP). The needs-based Guaranteed Income Supplement program has maximum amounts. In 2026, this is CAD 1,108.74 for a single person.

Useful resources

• Government of Canada – information on public pensions (accessed 19th Feb 2026)
• Canada Revenue Agency (CRA) – tax information on Canadian pensions (accessed 19th Feb 2026)
• Financial Advisors Association of Canada (Advocis) – find a tax advisor in Canada (accessed 19th Feb 2026)
• Quebec Pension Plan (QPP) – information on the public pension in Quebec (accessed 19th Feb 2026)