CPP & EI Contributions in Canada Explained (2026)
Last updated: June 2026
Beyond income tax, two payroll deductions reduce a Canadian paycheck: CPP (Canada Pension Plan) and EI (Employment Insurance). Both have annual earnings caps, so high earners stop paying them partway through the year. Here is how they work for 2026.
Canada Pension Plan (CPP)
CPP is contributed at 5.95% on earnings between the $3,500 basic exemption and the annual maximum (around $74,600 for 2026). It funds your retirement pension, disability benefits and survivor benefits. Your employer matches your contribution.
Employment Insurance (EI)
EI is contributed at 1.63% on earnings up to the annual maximum insurable earnings (around $68,900 for 2026). It funds temporary income support if you lose your job, plus maternity, parental and sickness benefits.
Why these caps matter
Because both CPP and EI stop at their earnings caps, your take-home pay as a percentage of gross actually improves once you pass those thresholds for the year — though income tax keeps rising. This is why high earners see proportionally more of each additional dollar than the headline marginal rate suggests.
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