DBPP (Defined Benefit Pension Plan)

Tax & Income

A workplace pension where your employer promises you a specific monthly payment in retirement, usually based on your salary and years of service. For example: 2% times your years worked times your final salary. The employer takes all the investment risk. Often called the gold standard of pensions.

Related Terms

Marginal Tax Rate

The tax rate you pay on your last dollar of income. If your marginal rate is 30%, every extra dollar you earn means you keep 70 cents and pay 30 cents in tax. This is different from your average tax rate because Canada uses tax brackets where you pay different rates on different portions of your income.

Take-Home Pay

The actual money that lands in your bank account after all deductions (taxes, CPP, EI) are taken from your gross salary. Also called net pay. This is what you actually have to spend.

Gross Income

Your total income before any taxes or deductions are taken off. It's the number on your job offer or T4 slip.