The use of recycled tire shreds as a compressible inclusion behind cantilever retaining wall is an effective method to reduce the seismic earth pressures acting on the wall. A two-dimensional finite element analysis based on PLAXIS 2D was developed to analyze the response of a typical cantilever retaining wall, consisting of compressible tire shreds (CTS) as a cushion, under earthquake ground motion applied at the wall base. The numerical model was first validated against experimental shake table test results available in the literature. To quantify the benefit of CTS cushion, a comparison was made in the behavior of wall without and with cushion in terms of horizontal displacement and rotation, the maximum shear force and bending moment, the seismic earth thrust and its point of application on the wall. The results from the analysis indicate that the dynamic earth thrust against the wall reduced considerably due to the presence of cushion made up of compressible tire shreds. © 2022, The Author(s), under exclusive licence to Springer Nature Switzerland AG.