2026 Brackets, Credits and Rules
CPP, CPP2 and EI contributions 2026: maximums, rates and how they reduce tax
2026 CPP ($74,600, 5.95%), CPP2 ($85,000, 4%) and EI ($68,900, 1.63%) maximums, self-employed amounts, Quebec QPP and QPIP, and how each one is deducted or credited.
For 2026, employees outside Quebec pay CPP at 5.95% on earnings between $3,500 and $74,600 (maximum $4,230.45), CPP2 at 4% on earnings between $74,600 and $85,000 (maximum $416) and EI at 1.63% on insurable earnings up to $68,900 (maximum $1,123.07). Employers pay a matching CPP and CPP2 amount and 1.4 times the employee's EI premium. Someone earning $85,000 or more therefore contributes $5,769.52 in total as an employee. Part of CPP is claimed as a credit and part as a deduction, so the contributions also lower income tax.
This guide belongs to the 2026 overview. Quebec employees pay QPP, a lower EI rate and QPIP instead (see below). It is general information, not tax advice.
2026 contribution figures
| Contribution (2026) | Earnings range | Employee rate | Employee maximum | Employer |
|---|---|---|---|---|
| CPP (base + first enhancement) | $3,500 to $74,600 | 5.95% | $4,230.45 | Matches |
| CPP2 (second enhancement) | $74,600 to $85,000 | 4% | $416.00 | Matches |
| EI (outside Quebec) | up to $68,900 | 1.63% | $1,123.07 | 1.4 × employee |
| QPP (Quebec) | $3,500 to $74,600 | 6.3% | $4,479.30 | Matches |
| QPP2 (Quebec) | $74,600 to $85,000 | 4% | $416.00 | Matches |
| EI (Quebec rate) | up to $68,900 | 1.30% | $895.70 | 1.4 × employee |
| QPIP (Quebec parental insurance) | up to $103,000 | 0.430% | $442.90 | 0.602% |
The CPP maximum is calculated as ($74,600 − $3,500) × 5.95% = $71,100 × 5.95% = $4,230.45. CPP2 is ($85,000 − $74,600) × 4% = $10,400 × 4% = $416.
How CPP and EI reduce your income tax
The tax treatment is split, and it is the reason a pay stub and a tax return show different numbers:
- Base CPP (the original 4.95% of the 5.95%) gives a non-refundable credit at 14% federally and at the lowest provincial rate.
- Enhanced CPP (the extra 1%) and all CPP2 are deductions from income, worth your marginal rate.
- EI premiums give a non-refundable credit.
Worked example (illustrative, 2026): an employee earning $75,000.
| Item | Calculation | Amount |
|---|---|---|
| CPP | $71,100 × 5.95% | $4,230.45 |
| of which base (credit) | $4,230.45 × 4.95 ÷ 5.95 | $3,519.45 |
| of which enhanced (deduction) | $4,230.45 − $3,519.45 | $711.00 |
| CPP2 (deduction) | ($75,000 − $74,600) × 4% | $16.00 |
| EI (credit) | $68,900 × 1.63% | $1,123.07 |
| Total withheld from pay | $5,369.52 |
Net income falls by $727 (the enhanced CPP and CPP2 deductions), and the federal credits include $3,519.45 + $1,123.07 = $4,642.52 of contribution amounts, worth $649.95 at 14%. The take-home pay guide carries this through to net pay.
Self-employed contributions
If you are self-employed, you pay both halves of CPP and CPP2 on net self-employment earnings when you file your return:
- CPP: 11.9% on earnings between $3,500 and $74,600, maximum $8,460.90 for 2026.
- CPP2: 8% between $74,600 and $85,000, maximum $832.
Half of the self-employed contribution (the "employer" share) is deducted from income, and the employee-equivalent share is split again into a base credit and an enhanced deduction. EI is not compulsory for the self-employed; you can opt in to EI special benefits (maternity, parental, sickness, caregiving) by registering with Service Canada, after which premiums are payable on self-employment earnings. Quebec self-employed people pay QPP at double rates and QPIP at a self-employed rate.
Because self-employed CPP is paid with the return, it often catches new freelancers off guard: on $60,000 of net earnings, CPP alone is ($60,000 − $3,500) × 11.9% = $6,723.50, due April 30 along with income tax.
Overpayments, multiple jobs and exemptions
Two employers. Each employer deducts CPP and EI as if it were your only job and starts again at $0 each January. If you had two jobs and together exceeded the maximums, you will have overpaid. The return calculates the overpayment (lines 44800 for CPP and 45000 for EI) and refunds it. Employers do not get their share back.
Changing jobs. The same applies when you change employer mid-year: the new employer starts deductions from zero.
Age limits. CPP contributions stop at 70. Between 65 and 70, if you already receive a CPP retirement pension, you can elect to stop contributing by giving Form CPT30 to your employer. Contributions start at 18.
EI and low earnings. If your insurable earnings are $2,000 or less, EI premiums paid are refunded on the return.
Why the maximums matter for planning
- Your marginal rate inside the CPP/EI ranges includes these contributions, but your income tax marginal rate does not. Above $85,000 a raise attracts no further CPP/EI, so net pay per extra dollar rises.
- An RRSP deduction does not reduce CPP or EI, which are based on gross employment earnings.
- Salary paid through a corporation (for owner-managers) carries CPP; dividends do not. That trade-off is a corporate planning question beyond this site; a professional accountant can model it.
Frequently asked questions
Will I get CPP2 back as a bigger pension?
Yes, CPP2 contributions build the second additional part of the CPP retirement pension, payable when you take CPP. The amount depends on your contribution history; see Service Canada.
Why is EI lower in Quebec?
Quebec runs its own parental insurance plan (QPIP), so federal EI does not pay maternity and parental benefits there. Quebec workers pay a reduced EI rate plus QPIP premiums.
Do I pay CPP on a bonus?
Yes, until you reach the annual maximum. That is why late-year pay can rise once the maximum has been reached.
Do pensioners pay CPP or EI?
No. CPP and EI are based on employment and self-employment earnings, not on pension, RRSP, RRIF or investment income.
Official sources
- CRA: RRSP, TFSA limits and YMPE — YMPE $74,600 and YAMPE $85,000 for 2026
- Canada Revenue Agency — payroll deductions and contribution rates
- Revenu Québec — QPP and QPIP rates for 2026
- Retraite Québec — the Quebec Pension Plan
- Government of Canada (canada.ca) — Service Canada information on CPP pensions and EI benefits
