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Cost and payment options

For a full-time teacher with a salary of around $85,000, making up for a year’s gap in your pension typically costs about $10,000.

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You have choices

If you’re like many teachers, paying for that $10,000 leave could increase your pension by about $2,000 each year.

Most of our retired members collect a pension for about 30 years, so paying for that time off today could mean you’ll get as much as $60,000 more throughout your retirement.

A few things to keep in mind:

  • Your pension is about as close to a guaranteed investment as you can get. When you retire, your monthly payments will be determined by a formula, not the ups and downs of the market.
  • You can buy back as little or as much as you want. You’ll receive service credit that's proportional to the amount you’ve paid.
  • You have up to five years from the end of your leave or reduced workload to pay, or up to the date of your first pension payment (whichever comes first).
  • If you decide to buy back, it’s best for you to tell us by April 30 of the calendar year following the year your leave or reduced workload ends. This’ll make your tax situation less complicated.

The cost

Let’s say you took one year away from full-time work. Your salary, as reported by your employer, was around $85,000 before your time off. To get a rough idea of how much it would cost to buy back, multiply the salary you earned before your time off by the contribution rate(s) for the period you're paying for (2024's contribution rate is 12%): $85,000 × 12% = $10,200 plus interest.

Please enter a value between 40000 - 150000.

How long will your leave be?

  • 1 month
  • 6 months
  • 12 months
  • 18 months
  • 24 months

Your XXX month leave...

$5,100

$85/month over 5 years

DISCLAIMER

This calculator provides an estimated cost (excluding interest) of your employer-approved leave. This isn't your final cost. Your final cost factors in your total salary prior to going on leave, as determined under the terms of the plan. It also factors in the contribution rate(s) for the year(s) you were away from work, as well as your assigned salary, which is determined by the Ministry of Education. 

This is just one example of a payment plan option. You can make a payment towards your leave any time before your leave's payment deadline. 

Factors that affect your buyback cost

  • Contributions
    We multiply the salary associated with what you would've earned if you had worked (which is based on your salary before your time off) by the contribution rate(s) for the year(s) you've been away. The amount will be slightly more than what you would’ve contributed to the plan if you had continued to work.
  • Assigned salary
    If your time off spans school years, we base your assigned salary (what you make contributions on) on the salary you earned before your time off. Each new school year, we apply increases that are determined by the Ministry of Education.
  • Interest
    Interest will be applied to the cost of your buyback beginning the first of the month following the end of your leave or reduced workload. 

When to pay

You have up to five years from the end of your leave or reduced workload to pay, or up to the date of your first pension payment (whichever comes first).

When you pay in cash (online banking or cheque), you could be eligible for a tax deduction for the calendar year you make the contribution. The amount of the deduction will depend on how much taxable income you generated in the calendar year (we'll send you a tax receipt in February for any payments made in the previous year).

For example, let's say teaching is your only source of employment income, and you returned to work in September 2023 after being away for a year. Your tax deduction would only apply to four months of salary.

When your time off starts

  • The Buyback Centre in your online account will show you the maximum lump-sum you can pay in a calendar year.
  • You can't prepay for the portion of a leave that extends into future calendar years.
  • For reduced workloads, you must submit an application and wait to apply until the earlier of:
    • the end of the school year in which a period of reduced workload occurs, or
    • the end of a complete period of reduced workload.

During your time off

  • Your leave or reduced workload doesn't incur interest.
  • You can start paying as soon as we tell you the cost of your leave. For reduced workloads, we won't provide a cost until you've applied and we've approved your application. You may want to talk to a tax advisor first.

When your time off ends

  • Interest starts once your leave or reduced workload ends.
  • Our interest rates have recently hovered around 2%, but can change, and may increase, before you finish paying for your time off.

When you return to work

  • We'll send you a tax receipt in February for any payments made with online banking or cheque in the previous calendar year.
  • You can use that receipt to claim a deduction on your tax return.
  • You have until April 30 of the year following the end of your leave or reduced workload to let us know if you want to buy back. So, if your leave ended in 2023, let us know if you’d like to buy back by April 30, 2024.

Five years to pay

  • You have up to five years from the end of your leave or reduced workload to pay, or up to the date of your first pension payment (whichever comes first).

How to pay

Pay for your leave or reduced workload with cash (online banking or cheque), RRSPs or a combination of both. You can’t pay with a credit card or through payroll deduction.

Online banking Online banking

  • Many of your colleagues use online banking to pay in multiple installments.
  • Payments must be made from your personal or joint bank account.
  • We’ll send you a tax receipt by the end of February each year for the payments you made in the previous calendar year. Use this to claim a deduction on your tax return for the previous year.

Pay online

  1. Ensure you’ve told us you plan to pay for your leave, or have applied for reduced workload, and you've received a cost from us.
  2. Log in to your bank account.
  3. Set up “Ontario Teachers' Pension Plan” as a payee and enter your nine-digit Ontario Teachers' account number.

Cheque Cheque

  • Payments must be made from your personal or joint bank account.
  • We’ll send you a tax receipt by the end of February each year relating to the payments that you made in the previous calendar year. You can use this to claim a deduction on your tax return for the previous year.

Pay by cheque

  1. Ensure you’ve told us you plan to pay for your leave, or have applied for reduced workload, and you've received a cost from us.
  2. Make your post-dated cheque(s) payable to the Ontario Teachers' Pension Plan.
  3. Write your nine-digit account number on the cheque.
  4. Mail your cheque to:
    Ontario Teachers' Pension Plan
    160 Front Street West, Suite 3200
    Toronto, Ontario, M5J 0G4
Ontario Teachers' sample buyback cheque

RRSP RRSP

  • A transfer can take up to six weeks.
  • You could take a hit on high administration fees from your financial institution.
  • You won't get a tax break – you’re moving money from one type of tax-sheltered retirement plan to another.
  • You won’t regain RRSP contribution room for the amount you’re putting towards your leave or reduced workload.

Transfer funds from your RRSP

  1. Complete the Direct Transfer from RRSP form with your financial institution.
  2. Have them mail the form with the transferred funds to:
    Ontario Teachers' Pension Plan
    160 Front Street West, Suite 3200
    Toronto, Ontario, M5J 0G4

Getting started

Once you or your employer inform us of your leave, or you've applied and been approved for your reduced workload, we'll update your Buyback Centre. Once we have it on record, paying for it is simple:

  1. Visit your  Buyback Centre
  2. Tell us if you plan to pay for your leave or reduced workload. We need to know by  April 30 of the calendar year following the year it ends
  3. Start making payments
Contributions to another pension plan during your leave or reduced workload can have an impact on your taxes. Call us at 1-800-668-0105  if you worked, or are planning to work, during your time off.

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Taxes and timing

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