Tax information for retired members
Your pension is taxable income. We will deduct federal and provincial income tax from your monthly pension payment.
Deductions from your monthly pension payment
Your pension is taxable income. This means we deduct income tax from your gross monthly pension payment. The amount we deduct is based on the income you receive from the plan. Your other sources of income may have tax deducted at a different rate.
The net monthly pension payment is calculated as follows:
- Your gross pension amount
- Minus income tax
- Minus (if applicable) monthly premiums for retirement extended health care and dental coverage, as well as Medical Services Plan
The amount of income tax we deduct from your monthly pension payment depends on where you live. Each province and country has its own tax rate. We use the tax rate for your province of residence, and if you live outside Canada, we use the tax rate for the country where you are living (as specified by the Canada Revenue Agency).
Important note: the amount we deduct from your monthly pension payment assumes your pension is your only source of income. If you have other sources of income, such as benefits from the Canada Pension Plan or old age security, this could put you into a higher tax bracket and result in more taxes owed.