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 are required by law to deduct income tax from your gross monthly pension payment. The amount we deduct is based on a single-person rate and the income you receive from BC's College Pension 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 extended health care, dental and/or Medical Services Plan of BC coverage
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 or, if you live outside Canada, the tax rate for your country of residence, as specified by the Canada Revenue Agency (CRA).
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 in a higher tax bracket and result in more taxes owed.
How to request that we deduct additional tax
You can ask us to deduct more income tax from your monthly pension payment. Send us a written request that includes your full name, signature and three personal identifiers, such as:
- Person ID (find this on your pension statement)
- Date of birth
- Telephone number
If you send your request electronically, we don't need your signature.
As part of your request, please tell us how you want the additional income tax deducted:
- Total dollar amount
- Additional dollar amount
- Total per cent
Income splitting and your pensionYou may be able to reduce the total tax you pay by transferring part of your pension income to your spouse or common-law partner.
This process, known as income splitting, allows individuals to allocate a portion of their income to a spouse who has lower earnings. This may create tax savings for couples.
Contact CRA for more details. You may also wish to speak with a financial adviser or accountant to find out if transferring part of your pension income is to your advantage.