Updated Checked by the Tax-Services.ca editorial team How we check
CPP and EI contributions for 2026 start with two rates. An employee pays CPP at 5.95% on earnings between $3,500 and $74,600, and EI at 1.63% on earnings up to $68,900 outside Quebec. The employer matches the CPP dollar for dollar and pays 1.4 times the employee’s EI. You hold both deductions back from pay and pass them on with the employer share, so they’re never the employee’s expense or the company’s income.
What are the 2026 CPP and EI contribution rates and maximums?
Both plans stop taking money once earnings reach a ceiling. CPP is the Canada Pension Plan and EI is Employment Insurance, and the matching amounts the employer pays are employer contributions on top of gross pay. After that, pay arrives with no CPP or EI deducted until the year turns over, which is why high earners see a fatter paycheque late in the year. These figures come from the CRA payroll pages.
| Item | 2025 | 2026 |
|---|---|---|
| CPP maximum pensionable earnings | $71,300 | $74,600 |
| CPP basic exemption | $3,500 | $3,500 |
| CPP rate, employee and employer each | 5.95% | 5.95% |
| CPP maximum per person | $4,034.10 | $4,230.45 |
| EI maximum insurable earnings | $65,700 | $68,900 |
| EI employee rate (outside Quebec) | 1.64% | 1.63% |
| EI maximum employee premium | $1,077.48 | $1,123.07 |
| EI maximum employer premium | $1,508.47 | $1,572.30 |
There’s a second CPP layer too. Earnings between $74,600 and $85,000 in 2026 carry an extra contribution called CPP2, at 4%, with a maximum of $416 each for the employee and the employer. Most of your staff will never reach it, but a manager on $90,000 will.
Some 2027 figures are already confirmed. CPP maximum pensionable earnings rise to $76,700 with a second ceiling of $87,400, and the CPP rate drops to 5.75% while CPP2 stays at 4%. EI maximum insurable earnings rise to $70,800 at a 1.64% employee rate, which makes the maximum employee premium $1,161.12. Quebec’s QPP figures for 2027 aren’t published yet, so check the CRA’s payroll pages before you set up January payroll.
How do I work out one pay period?
Take an employee paid $2,500 every two weeks, which is $65,000 a year. Our payroll deductions calculator shows $140.74 of CPP and $40.75 of EI for Ontario. The CPP figure comes from pay above the exemption, which the calculator spreads across 26 pay periods: $2,500 less about $134.62 of exemption, times 5.95%.
The employer side is where people slip. Your matching CPP is also $140.74. Your EI is 1.4 times $40.75, or $57.05. So a $2,500 cheque really costs you $2,697.79 before anything else, and the employee sees $1,944.45 after all deductions.
Over the year that’s $3,659.25 of CPP and $1,059.50 of EI from the employee, and the same CPP plus $1,483.30 of EI from you. Neither maximum is reached at $65,000, so nothing stops mid-year.
What happens when someone hits the maximum?
Picture Priya, a manager in Winnipeg on $90,000. She crosses every ceiling before December. Her CPP tops out at $4,230.45 and her CPP2 at $416, so $4,646.45 in all, and her EI stops at $1,123.07. Your matching share is the same $4,646.45 of CPP plus $1,572.30 of EI, or $6,218.75 on top of her salary.
Once a payroll item reaches its maximum, you stop deducting it. The CRA’s page on deducting EI premiums sets out the stopping point for EI. Let the payroll software track the year-to-date totals instead of turning a deduction off by guesswork.
How do I record these contributions in the books?
Think in three buckets.
Gross wages are an expense. Your CPP and EI share is another expense. And what you deducted from the employee, along with your own share, sits as an amount owing to the CRA until you send it in.
That means the employee’s deduction never touches your profit. Only your share does.
Most accounting programs handle all of this once the payroll items are set up properly, but because one wrong rate in January repeats on every cheque until someone notices, check the first run against a hand calculation. To see what a month of remittances looks like, use the payroll remittance calculator.
Records matter here. Keep a record per employee: gross pay, pensionable earnings, insurable earnings, each deduction and the year-to-date totals. You’ll want them for year-end slips and for any CRA question. On how long to hang on to them, the CRA’s general rule is clear.
Keep your records for six years from the end of the last tax year they relate to, unless you have permission from the CRA to destroy them earlier.
Keeping Records, canada.ca
What differs in Quebec and for the self-employed?
Quebec has its own pension plan, the QPP, and its own parental insurance, so its payroll is separate. The federal EI rate is lower there: 1.30% in 2026 with a maximum employee premium of $895.70 and an employer maximum of $1,253.98. QPP and QPIP rates are set by Revenu Québec, so check its current tables before you run payroll there.
If you work for yourself you pay both halves of CPP. The CRA puts the 2026 maximum at $8,460.90, with up to $832 more for CPP2. Our self-employed tax calculator estimates it, although it leaves out EI.
How do you check the first payroll run of the year?
Pick one employee and rebuild the cheque by hand before you trust the software. Using the $2,500 biweekly example, take the pay less the exemption share of about $134.62, multiply by 5.95%, and you should land on $140.74 of CPP. Multiply $2,500 by 1.63% and you should see $40.75 of EI. Your own side is the same CPP plus $57.05 of EI, so $197.79 on top of the gross pay.
If the software disagrees, look at the rates and ceilings first, since a leftover figure from last year is the usual cause. Next check that the employee is flagged correctly for CPP and EI, and that the pay period count is right. Fix the setup before the second run, because the same error repeats on every cheque. Keep the hand calculation in the payroll file as proof of what you checked.
What should the year-end totals for each employee show?
At year end, open the record for each employee and compare the totals with the maximums in the table. No one should show more than $4,230.45 of CPP, $416 of CPP2 or $1,123.07 of EI deducted from pay. Priya, from the example above, should show $4,646.45 of CPP and CPP2 combined. Your matching CPP should equal the employee total, and your EI should equal 1.4 times the employee amount, which for her is $1,572.30.
A total above a maximum means something kept deducting after it should have stopped, and a total far below one means a deduction was missed. Either way, contact the CRA or your payroll provider before you issue year-end slips, and keep a note of what you found and how you fixed it. Check the CRA payroll pages for your own case.
Common payroll mistakes
Using last year’s rates is the big one, and it’s easy to do. The rates and ceilings change every January, and the EI rate even moved down by a hundredth of a point this year. Forgetting the employer’s 1.4 multiplier on EI comes second.
Another is stopping CPP at the wrong moment. The $3,500 exemption is spread over pay periods, so it doesn’t vanish on the first cheque. A bonus can also push one pay period’s deductions up, and our bonus tax calculator shows what a bonus does to income tax.
How we checked the figures
CPP rates, ceilings and maximums come from the Canada Revenue Agency‘s CPP contribution page for 2025 and 2026. EI premium rates, maximums and the 1.4 employer multiplier come from the CRA’s EI premium page. The CPP2 figures come from the CRA’s CPP2 page. Pay examples come from the calculators listed above. This is an independent guide, and it doesn’t speak for any government.
Frequently asked questions
Does the employer pay CPP and EI too?
Yes. The employer matches the employee's CPP and pays 1.4 times the employee's EI premium.
What are the 2026 CPP and EI maximums?
CPP is $4,230.45 per person and EI is $1,123.07 for the employee outside Quebec.
At what pay do CPP and EI stop?
CPP stops at $74,600 of earnings, then CPP2 applies up to $85,000. EI stops at $68,900.
Do self-employed people pay EI?
Not by default. They pay both halves of CPP, which the CRA puts at $8,460.90 for 2026.
Are Quebec rates the same?
No. Quebec's EI rate is 1.30% for 2026. QPP and QPIP rates are set by Revenu Quebec.
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