CPP, EI & Payroll Contributions – Canada
Canada's social insurance system is funded through the Canada Pension Plan (CPP) and Employment Insurance (EI). CPP provides retirement, disability, and survivor pensions. EI covers unemployment, parental leave, and sickness benefits. Both are mandatory for employed and self-employed individuals (EI optional for self-employed).
CPP, EI & Payroll Contributions
Canada's social insurance system is funded through the Canada Pension Plan (CPP) and Employment Insurance (EI). CPP provides retirement, disability, and survivor pensions. EI covers unemployment, parental leave, and sickness benefits. Both are mandatory for employed and self-employed individuals (EI optional for self-employed).
CPP Employee Contributions (2026)
Applied to pensionable earnings between the basic exemption ($3,500) and the Year's Maximum Pensionable Earnings ($74,600). Maximum employee CPP1 contribution: $4,230.45.
Additional contribution on earnings between $74,600 (YMPE) and $85,000 (YAMPE). Part of the CPP Enhancement fully phased in. Maximum CPP2 contribution: $416.00.
Combined CPP1 ($4,230.45) + CPP2 ($416.00) for employees earning $85,000 or more. This is the maximum annual CPP deduction from an employee's pay.
First $3,500 of earnings are exempt from CPP contributions. Applied proportionally per pay period. No CPP on earnings below this threshold.
EI Employee Contributions (2026)
Effective rate of 1.63% on insurable earnings. Decreased slightly from $1.64 in 2025. Deducted from each paycheque until maximum reached.
EI premiums are only charged on earnings up to $68,900 in 2026, up from $65,700 in 2025. Income above this is not subject to EI.
Maximum EI premium an employee pays in 2026. Once deductions reach this amount, no further EI is withheld for the remainder of the year.
Employer Contributions (2026)
Employers match the full employee CPP1 (5.95%) and CPP2 (4%) contributions dollar for dollar. Maximum employer CPP contribution also $4,646.45.
Employers pay 1.4 times the employee EI premium rate ($2.28 per $100 of insurable earnings). Maximum employer EI premium: $1,572.30.
Maximum employer cost per employee: CPP1 $4,230.45 + CPP2 $416.00 + EI $1,572.30. This is on top of salary — not deducted from employee pay.
Self-Employed Contributions
Self-employed pay both employee and employer CPP portions: 11.9% for CPP1 (on earnings $3,500–$74,600) plus 8% for CPP2 (on $74,600–$85,000). Maximum: $9,292.90.
The employer-equivalent portion of CPP is deductible from income. The enhanced CPP contributions (above the 2018 rate of 4.95%) are also deductible rather than a credit.
Self-employed can opt into EI Special Benefits (maternity, parental, sickness, compassionate care). If opted in, pay the employee rate only (1.63%). Not eligible for regular unemployment benefits.
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