CPP Contribution Rates 2026 | CPP, CPP2 & EI Maximum Contributions

CPP Contribution Rates 2026

The Canada Pension Plan is a mandatory earnings-based retirement program that applies to nearly every working Canadian. Both employees and employers contribute a set percentage of earnings each year and the contributions fund the CPP retirement pension you receive from age 60 onward. Unlike the RRSP, you cannot opt out of CPP if you are an employee under 70, and your employer is legally required to match your contribution dollar for dollar.

The contribution structure has two separate components since 2024. The original CPP which is now called CPP1 and covers earnings up to the Year’s Maximum Pensionable Earnings (YMPE) of $74,600 for 2026. A newer CPP2 enhancement covers a band of earnings above that, up to a second ceiling (YAMPE) of $85,000. Both components have different rates and maximum contributions. The key figures for 2026 are summarized below.

The $3,500 basic exemption applies to CPP1 only with contributions begin on the first dollar of earnings above $3,500, up to the YMPE. CPP2 has no basic exemption; it applies to every dollar earned between $74,600 and $85,000.

CPP1 — First Component

CPP1 is the original Canada Pension Plan. It applies to all pensionable employment earnings between the $3,500 basic exemption and the YMPE ($74,600 in 2026). This is the contribution that the vast majority of Canadians make as any employee earning $74,600 or more will hit the maximum CPP1 contribution by year-end.

The math is straightforward: ($74,600 − $3,500) × 5.95% = $71,100 × 5.95% = $4,230.45. Employers contribute an equal $4,230.45, meaning each maximally-contributing employee generates $8,460.90 in total CPP1 contributions on their behalf each year. For self-employed individuals, there is no matching employer so they pay both sides themselves at 11.90%, which is why the self-employed maximum is exactly double the employee maximum. The CPP for self-employed guide covers the deduction mechanics, quarterly instalments, and how to claim the employer-half deduction at filing.

CPP2 — Second Component (Enhancement)

CPP2 is the newer enhancement tier introduced in 2024. It applies to earnings in the band between the YMPE ($74,600) and the Year’s Additional Maximum Pensionable Earnings (YAMPE, $85,000). Only workers who earn above $74,600 make CPP2 contributions, and the band is relatively narrow at just $10,400 wide which is why the maximum CPP2 contribution is modest compared to CPP1.

The calculation: ($85,000 − $74,600) × 4% = $10,400 × 4% = $416.00. Unlike CPP1 contributions, employee CPP2 contributions generate a deduction from net income rather than just a non-refundable tax credit which is a meaningful distinction explained in the tax treatment section below. The CPP2 enhancement is projected to boost career-long retirement replacement rates from roughly 25% to 33% of pre-retirement earnings for workers who contribute at the maximum throughout their career.

For a deeper look at how CPP2 contributions are calculated and what the enhancement means for your projected retirement income, see the CPP2 contributions guide.

Total Maximum Contributions 2026

When you combine CPP1 and CPP2, the total annual contribution burden for 2026 is as follows. These figures represent the maximum payable so workers earning less than $74,600 will contribute less, since CPP1 is capped at the YMPE and CPP2 does not apply at all.

Self-employed Canadians bear the full $9,292.90 cost because no employer exists to pay the matching half. The employer’s share of CPP1 is deductible as a business expense, which partially offsets the additional burden, but the cash outlay remains roughly double that of an equivalent salaried employee.

CPP Contribution Rate History

The CPP enhancement program ran from 2019 to 2023, gradually increasing the CPP1 rate from 4.95% in 2018 to the current 5.95%. The rate has been stable at 5.95% since 2023. CPP2 was layered on top starting in 2024, applying to the new upper earnings band that had not existed previously. The table below shows how maximum contributions have grown over this period.

The most notable jump in this table is the introduction of CPP2 in 2024. A worker earning $85,000 who maximized contributions in 2023 paid $3,754.45. The same worker in 2024 paid $4,055.50 — a $301 increase driven entirely by the new CPP2 tier, with the CPP1 rate unchanged. The increase from 2024 to 2026 reflects both the growth of the YMPE and YAMPE ceilings (indexed annually) and the stable 4% CPP2 rate applying to a wider earnings band.

For the full year-by-year record going back to CPP’s founding in 1966, see the CPP contribution history.

CPP2 Phase-In Timeline

CPP2 was phased in over 2024 and 2025. The phase-in period referred to in government communications was about expanding the earnings band itself and the YMPE and YAMPE ceilings are indexed to average wage growth each year, so the contribution band widens annually, but the rate has been constant since inception.

Because the YAMPE increases with average wages each year, the CPP2 contribution band and therefore the maximum CPP2 contribution grows annually even though the percentage rate stays at 4%.

Who Pays CPP?

CPP applies to most employed and self-employed Canadians, but there are age-based rules that create flexibility for workers approaching or past the standard retirement age.

Once you turn 65, you can file CRA Form CPT30 to elect to stop making CPP contributions. For those who do continue contributing after 65 and are already receiving CPP, and are under age 70, each additional year of contributions generates the Post-Retirement Benefit (PRB), which will increase your retirement income.

Impact on Your Paycheque

CPP contributions are deducted from each pay period proportionally as your employer does not wait until December to catch up. This means low-income months early in the year carry the same effective CPP rate as high-income months, and workers who hit the YMPE partway through the year stop making CPP1 deductions once the annual maximum is reached.

The tables below show approximate CPP and EI deductions at various salary levels, covering both monthly and bi-weekly pay periods (the most common Canadian pay schedule). Workers earning below $74,600 pay CPP1 only; those above also pay CPP2.

Combined CPP and EI Maximums 2026

Many Canadians search for CPP and EI together because both are mandatory payroll deductions that appear on every paycheque. The table below shows the combined maximum for 2026.

The employer pays more in EI than the employee (1.4× the employee rate), which is why the employer total exceeds the employee total even though CPP contributions are equal.

EI 2026 key numbers at a glance:

EI premiums apply to insurable earnings up to $68,900. Unlike CPP, there is no basic exemption and EI is deducted from the first dollar earned. For the full breakdown of EI rates, benefit entitlements, and the Quebec QPIP, see the EI Contribution Rates 2026 page.

CPP Contributions and Your Future CPP Benefit

Every dollar you contribute builds a larger CPP retirement pension. CRA tracks your pensionable earnings on your Statement of Contributions, viewable through My Service Canada Account. Years with higher earnings, particularly years where you earn at or above the YMPE, contribute the most to your eventual benefit.

How the two tiers translate into retirement income:

• CPP1 contributions (on earnings up to the YMPE) fund the base CPP retirement benefit up to approximately 25% of average career earnings at the YMPE, or roughly $18,092 per year ($1,507.65/month which is the verified 2026 maximum)
• CPP2 contributions (on earnings between the YMPE and YAMPE) fund a separate enhanced benefit which projected to increase pension income replacement to 33.33% of your average lifetime working earnings.

The CPP calculator estimates your projected retirement pension based on your earnings history, age, and planned retirement date. If you want the deduction side instead, use the CPP contribution calculator. The retirement calculator also models the impact of starting CPP at 60, 65, or 70 and the deferral mechanics that can increase your benefit by up to 42% if you wait until 70. For the current 2026 maximum monthly amounts broken down by benefit type and age, see maximum CPP payment amounts.

To check your actual Statement of Contributions: log into My Service Canada Account → View CPP Statement of Contributions. This is the definitive record and the same data CRA uses to calculate your retirement benefit.

The CPP Tax Credits at Filing

CPP contributions do not reduce your income the same way RRSP contributions do but they generate tax credits, not a straight income deduction. The exception is CPP2, which is treated differently and more favourably. Understanding the distinction matters at filing time.

The CPP1 allows you to claim a non-refundable tax credit for your base CPP contributions. The CPP2 allows you to claim a tax deduction for the enhanced portion. The tax deduction works to reduce the amount of income that is subject to income tax, while the non-refundable tax credit reduces income tax.

CPP Overpayment Refund

Workers with multiple employers in a year or who change jobs mid-year may end up over-contributing to CPP. Each employer withholds CPP independently based on annualized pay, without knowing what other employers have withheld. If the combined total exceeds the maximum, then you have overpaid.

Complete schedule 8 or form RC381 depending on which applies to you, to calculate the amount, if there is one, of your overpayment to enter on line 44800 of your return. The overpayment will then be refunded or used to reduce your tax balance owing.

Related Pages

• CPP, OAS & GIS Hub
• CPP2 Contributions Guide
• CPP for the Self-Employed
• Is CPP Taxable?
• CPP Contribution History
• Maximum CPP Payment Amounts
• CPP Calculator
• CPP Contribution Calculator Canada 2026
• CPP Payment Dates 2026
• When to Take CPP
• EI Contribution Rates 2026
• Payroll Tax Calculator