CPP and EI Rates for 2026: What Employers and Employees Need to Know

Key takeaways

• CPP maximum pensionable earnings (YMPE): $73,200 for 2026
• CPP2 upper earnings limit (YAMPE): $83,300 for 2026
• CPP employee and employer contribution rate: 5.95% on YMPE earnings above the $3,500 basic exemption
• CPP2 employee and employer rate: 4.00% on earnings between YMPE and YAMPE
• EI maximum insurable earnings: $65,700; employee premium rate: 1.64%; employer rate: 2.296%

Every year, the Canada Revenue Agency announces updated CPP and EI rates and thresholds. These numbers affect every Canadian with employment income — and every employer who processes payroll. Here are the 2026 figures and what they mean in dollar terms.

CPP in 2026

The CPP base contribution is calculated on earnings between the Year's Basic Exemption ($3,500, unchanged since the CPP's inception) and the Year's Maximum Pensionable Earnings ($73,200 for 2026). The contribution rate for employees is 5.95%; employers match this exactly.

Maximum CPP base contribution for an employee in 2026: ($73,200 - $3,500) × 5.95% = $4,147.85. The employer matches this dollar for dollar. Self-employed individuals pay both the employee and employer portions — $8,295.70 — which is fully deductible as a business expense (50%) and as a tax credit (50%).

CPP2 in 2026

The CPP2 enhancement, which began in 2024, applies a second contribution rate to earnings between the YMPE ($73,200) and the Year's Additional Maximum Pensionable Earnings ($83,300 for 2026). The CPP2 rate is 4.00% for both employees and employers.

Maximum CPP2 contribution: ($83,300 - $73,200) × 4.00% = $404.00 for employees. Employers match this as well. If an employee earns between $73,200 and $83,300, they pay CPP2 only on the excess above $73,200.

CPP2 contributions earn entitlement to an enhanced CPP retirement benefit in future. Like the base CPP, the CPP2 contribution is split between a deduction and a tax credit on the T1 return.

EI premiums in 2026

Employment Insurance premiums are calculated as a flat rate on insurable earnings up to the annual maximum. For 2026: maximum insurable earnings are $65,700. Employee premium rate is 1.64%. Employer premium rate is 2.296% (1.4× the employee rate).

Maximum employee EI premium: $65,700 × 1.64% = $1,077.48. Maximum employer EI premium: $65,700 × 2.296% = $1,508.47 per employee.

Employers in Quebec pay a reduced EI rate because Quebec administers its own parental benefits program (QPIP). Quebec employees pay 1.32% and Quebec employers pay 1.848%.

Payroll software and T4 implications

All payroll software should have been updated with 2026 rates by January 1. If you process payroll manually or use a spreadsheet, update your formulas immediately. The payroll deductions tables (T4032 for regular employers, T4008 for supplementary) are available on the CRA website at cra-arc.gc.ca.

On the T4 slip, CPP base contributions appear in box 16, CPP2 contributions in box 16A, and EI premiums in box 18. The year's maximum employer contribution amounts affect your payroll remittances — ensure your remittance calculations cap at the annual maximums when employees reach the earnings thresholds during the year.

Self-employed: an important difference

Self-employed individuals are exempt from EI premiums unless they voluntarily opt in through the self-employed EI program (for special benefits including maternity, parental, sickness, and caregiving). The CPP is mandatory for self-employed individuals with net self-employment income above $3,500. The full employer and employee CPP contributions — both CPP base and CPP2 — are payable by the self-employed person, though each portion has different tax treatment on the T1.