DCPP (Defined Contribution Pension Plan)

Tax & Income

A workplace pension where you and your employer contribute a set percentage of your salary, but your retirement income depends on how well the investments perform. You take the investment risk. Similar to an RRSP managed by your employer. You get whatever the account is worth when you retire.

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.