CPP and EI Rates for 2026: What Comes Off Every Paycheque

Two deductions come off every paycheque before income tax: CPP at 5.95 percent and EI at 1.63 percent. For 2026, CPP applies to earnings between $3,500 and $74,600, capping employee contributions at $4,230.45. A second tier called CPP2 adds 4 percent on earnings between $74,600 and $85,000, worth up to $416 more. EI stops at $68,900 of insurable earnings, giving a maximum premium of $1,123.07. An employee earning above all three ceilings pays $5,769.52 across the year. Employers pay more than that. This guide covers the rates, the ceilings, and who is exempt.

What Comes Off Your Paycheque in 2026?

The CPP contribution rate holds at 5.95 percent for a sixth year, matched by your employer. What changed is the ceiling. The Year’s Maximum Pensionable Earnings rose from $71,300 in 2025 to $74,600 in 2026, so anyone earning above the old limit now contributes on an extra $3,300 of income.

CPP2 adds a second layer on higher earnings. Introduced in 2024, it applies 4 percent to the band between the first ceiling of $74,600 and the second ceiling of $85,000, known as the Year’s Additional Maximum Pensionable Earnings. The maximum CPP2 contribution is $416, and it only affects people earning above $74,600.

EI moved the other way on rate and upward on ceiling. The employee premium dropped from 1.64 percent to 1.63 percent, but maximum insurable earnings climbed from $65,700 to $68,900, so the maximum premium still rose to $1,123.07. Quebec workers pay a reduced 1.63 percent equivalent of 1.30 percent, since the provincial parental insurance plan covers benefits EI handles elsewhere.

CPP and EI Rates 2026 at a Glance

The table below lists every 2026 figure alongside the 2025 comparison.

Item	2026	2025
CPP rate, employee and employer each	5.95%	5.95%
Basic exemption	$3,500	$3,500
Year’s Maximum Pensionable Earnings	$74,600	$71,300
Maximum CPP contribution, each side	$4,230.45	$4,034.10
CPP2 rate, each side	4.00%	4.00%
Second ceiling (YAMPE)	$85,000	$81,200
Maximum CPP2 contribution, each side	$416.00	$396.00
EI employee rate	1.63%	1.64%
EI employer rate	2.282%	2.296%
Maximum insurable earnings	$68,900	$65,700
Maximum EI premium, employee	$1,123.07	$1,077.48
Maximum EI premium, employer	$1,572.30	$1,508.47

How Much Comes Off at Three Salary Levels?

At $50,000 a year, CPP applies to $46,500 after the basic exemption, giving $2,766.75 in contributions. EI takes 1.63 percent of the full $50,000, or $815. The combined deduction is $3,581.75, which works out to about $298 a month before income tax touches anything.

At $75,000, both CPP ceilings come into play. Base CPP hits its maximum of $4,230.45, CPP2 adds $16 on the $400 above the first ceiling, and EI maxes out at $1,123.07 because the salary passed the $68,900 insurable limit. The total is $5,369.52.

At $95,000, every ceiling is cleared. CPP stops at $4,230.45, CPP2 stops at $416, and EI stops at $1,123.07, for a total of $5,769.52. Earnings above $85,000 carry no further CPP or EI at all, which is why high earners see their take home pay jump partway through the year. Owner managers deciding how much salary to run through payroll should read our comparison of salary vs dividends in Canada, since these contributions are a large part of that calculation.

What Employers Pay on Top?

Employer costs exceed the employee side, and the gap is larger than most owners expect.

1. CPP Is Matched Dollar for Dollar

Employers pay the same 5.95 percent on the same earnings, so every employee at the ceiling costs the business $4,230.45 in base CPP plus $416 in CPP2. Nothing about the employer portion is recoverable, and it rises every year with the ceiling.

Self employed people pay both halves themselves, which brings the base maximum to $8,460.90 plus $832 of CPP2. Half of that is deductible against income rather than claimed as a credit, which softens the cost but does not remove it.

2. EI Costs Employers 1.4 Times the Employee Rate

The employer EI rate for 2026 is 2.282 percent, which is 1.4 times the employee rate of 1.63 percent. At the $68,900 ceiling that comes to $1,572.30 per employee, against $1,123.07 on the employee side.

Added together, a single employee earning above every ceiling costs an employer $6,218.75 in statutory contributions before wages, benefits, or provincial payroll taxes. Businesses that want these calculations and remittances handled properly use payroll services in Toronto.

Who Pays Less or Nothing at All?

Several groups fall outside the normal rules. Anyone earning under $3,500 in a year pays no CPP, since the basic exemption covers the full amount. Workers under 18 are exempt from CPP entirely, though EI still applies to their earnings.

Age changes the CPP rules twice. Contributions become optional at 65 for anyone already receiving a CPP retirement pension, and stopping requires Form CPT30 filed with both the employer and CRA. At 70 contributions end automatically, with no form needed and no choice in the matter.

EI has its own carve out. Anyone who controls more than 40 percent of the voting shares of a corporation is not insurable, so an owner manager pays no EI on their salary and cannot claim regular benefits. Related persons employed by a family business face a separate insurability test. Our guide on payroll deductions in Canada sets out the full list, and Alberta businesses handle the work through payroll services in Calgary.

Where These Amounts Land on Your T4?

Your annual contributions appear in specific boxes on the slip you receive by the last day of February. Box 16 shows CPP contributions, Box 17 shows QPP for Quebec, and Box 18 shows EI premiums. Boxes 16A and 17A capture the CPP2 and QPP2 amounts added since 2024.

Two more boxes support those figures. Box 26 reports pensionable earnings and Box 24 reports insurable earnings, which is how CRA checks the deductions against the income. A mismatch between them produces a Pensionable and Insurable Earnings Review, and the employer absorbs the shortfall. Our guide to the T4 filing deadline for employers explains how that review works.

The slip itself should arrive by the end of February. If yours has not, our guide on when T4 slips come out and what to do if yours is missing covers the steps, and our comparison of T4 vs T4A vs T5 slips explains which form reports what income.

Check Your First Paycheque of the Year

Deductions reset every January, so the first cheque of 2026 took a visible step down from December. Anyone who had already maxed out CPP and EI by autumn 2025 started contributing again on January 1, and the ceilings now sit higher than they did last year.

Three checks are worth running. Confirm the CPP line reflects 5.95 percent of pay above the prorated exemption. Confirm EI sits at 1.63 percent until the $68,900 ceiling. Confirm your pay stub stops both once the annual maximums are reached, since a payroll system that keeps deducting past the ceiling produces an overpayment you have to claim back on your return.

Tax Return Filers PC runs payroll calculations and year end slips for employers through payroll services in Brampton, so the amounts withheld match the amounts reported.